Mrs. COLLINS, from the Committee on Governmental Affairs, submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany S. 2840]

The Committee on Governmental Affairs, having considered the
original bill (S. 2840) to reform the intelligence community and the
intelligence and intelligence-related activities of the United States
Government, and for other purposes, reports favorably thereon and
recommends that the bill do pass.

I. PURPOSE AND SUMMARY

On September 22, 2004, the Senate Governmental Affairs Committee
(the `Committee') unanimously approved the Collins-Lieberman National
Intelligence Reform Act of 2004, S. 2840. The purpose of this
legislation is to transform the U.S. intelligence community's Cold
War-era organizational structure into an integrated enterprise capable
of marshaling the full range of intelligence capabilities against
terrorism and other 21st Century threats to U.S. national security.
This legislation represents the most sweeping reform of the
intelligence community in more than fifty years.

The immediate genesis for this legislation is the report of the
National Commission on Terrorist Attacks Upon the United States (the
`9/11 Commission'), an independent, bipartisan body which spent
eighteen months investigating the causes of the September 11, 2001
terrorist attacks and assessing recommendations for preventing future
attacks. The 9/11 Commission itself built upon the work of several
prior commissions as well as the December 2002 report of the Joint
Inquiry of the Senate Select Committee on Intelligence and the House
Permanent Select Committee on Intelligence into Intelligence Community
Activities Before and After the Terrorist Attacks of September 11, 2001
(the `Congressional Joint Inquiry').

On July 22, 2004, the 9/11 Commission issued a 567-page report
containing over forty recommendations for improving the United States's
ability to prevent future terrorist attacks. Its recommendations were
divided into two parts: (1) policy-oriented recommendations, and (2)
recommendations for structural change to enable the U.S. Government to
implement these new policies.

In its report, the 9/11 Commission issued a stinging indictment
of the intelligence community's organizational structure, concluding
that `the intelligence community's confederated structure left open the
question of who really was in charge of the U.S. intelligence effort'
against al Qaeda. 1

[Footnote] In testimony before this Committee, 9/11 Commission
Chairman Thomas Kean and Vice Chairman Lee Hamilton stated that the two
most important Commission recommendations dealt squarely with
intelligence reform: (1) creation of a National Intelligence Director
(NID), separate from the intelligence agencies, with sufficient
authorities to manage the intelligence community, and (2) formation of
a National Counterterrorism Center (NCTC) to unify intelligence against
terrorism and to draft Executive Branch-wide interagency plans for
countering terrorism. 2

[Footnote 2: Making America Safer: Examining the
Recommendations of the 9/11 Commission, hearing before the Senate
Committee on Governmental Affairs, 108th Congress (July 30, 2004)
(testimony of Thomas Kean, Chair of the 9/11 Commission, and Lee
Hamilton, Vice Chairman of the 9/11 Commission).]

Immediately following the release of the 9/11 Commission's
report, Senate Leaders assigned the Committee the task of examining the
recommendations of the 9/11 Commission with respect to reorganization
of the executive branch and, in particular, the proposals to create a
NID and an NCTC.

The Committee responded immediately and in a bipartisan manner,
holding hearings and numerous meetings with experts during the August
recess. In the two months following the release of the 9/11 Commission
report, the Committee conducted an intensive and in-depth review of the
intelligence community's structure and performance and the 9/11
Commission's findings and recommendations related thereto. The
Committee held eight hearings in this time period, taking testimony
from, among many others, the Commission's Chair and Vice Chairman,
Secretary of State Colin Powell, Secretary of Homeland Security Tom
Ridge, Federal Bureau of Investigation Director Robert Mueller, Acting
Director of Central Intelligence John McLaughlin, and family members of
victims of the 9/11 terror attacks. The Committee also received input
from and conducted consultations with numerous others, including other
members of the Senate, the Administration, the 9/11 Commission staff,
and current and former intelligence, defense, and

law enforcement officials. In addition, the Committee reviewed
and benefited from many hearings on this subject conducted by other
committees of the Senate and House during this time.

The resulting legislation adopts and implements the two most
important recommendations of the 9/11 Commission: First, it creates a
NID who will manage the intelligence community and serve as the
President's chief intelligence adviser. The NID will have the strong
budget, personnel, standard-setting, and other authorities needed to
manage the intelligence community and to create a flexible and agile
network to respond to global terrorism and emerging threats. Second, it
forms the NCTC to unify intelligence against terrorism and to draft
interagency plans for countering terrorism.

By adopting these key measures, the bill addresses the central
organizational problem identified by the 9/11 Commission and many
others. The objective of the Collins-Lieberman legislation is to put
someone in charge of U.S. intelligence by creating a unified structure
in which one person, the NID, is in charge of and accountable for the
nation's intelligence operations. The creation of the NCTC, operating
under the NID's supervision and authority, will likewise ensure that
there is one place where terrorism-related information comes together,
and that Executive Branch-wide interagency plans are developed to fight
terrorism.

Collins-Lieberman contains a number of other important measures
which also implement recommendations of the 9/11 Commission. These
include provisions (1) to establish an information-sharing network
designed to facilitate and promote the sharing of information
throughout the federal government, with state and local authorities,
and where appropriate, the private sector, and (2) to create a Civil
Liberties Board to ensure that privacy and civil liberties are
protected as the President and executive agencies propose and implement
policies to fight terrorism.

Although the Committee gave considerable weight to the
unanimous, bipartisan recommendations of the 9/11 Commission, it did
not accept these recommendations without scrutiny or careful
consideration. In fact, as discussed herein, there were a number of
instances where the Committee chose to modify or enhance particular
recommendations made by the 9/11 Commission.

Further refinements and improvements to the legislation were
made during the markup of the bill on September 21 and 22, 2004.
Several amendments, for example, made enhancements to the legislation's
provisions designed to ensure that intelligence is collected, analyzed
and reported in an objective, impartial and apolitical manner.

The Committee's unanimous approval of the resulting legislation
reflects a strong, bipartisan consensus that transformational
intelligence reform is urgently needed. Simply put, the Committee
concluded that the United States's current intelligence structure will
not produce the level of performance needed to protect national
security in the 21st Century. Structural reform is necessary to unlock
the potential in the U.S. intelligence apparatus to counter 21st
Century threats. This reform will enable the knitting together of
intelligence agencies into an agile and flexible network to fight
terrorist networks.

As the 9/11 Commission put it:

We know that the quality of the people is more important than
the quality of the wiring diagrams. Some of the saddest aspects of the
9/11 story are the outstanding efforts of so many individual officials
straining, often without success, against the boundaries of the
possible. Good people can overcome bad structures. They should not have
to. 3

[Footnote]

[Footnote 3: Commission report, p. 399.]

Of course, no amount of structural reform can ensure perfect
performance by the intelligence community or guarantee the safety of
Americans against terrorist attacks. But Congress needs to act quickly
to create the structural framework necessary for maximizing the
intelligence community's performance.

II. BACKGROUND

I. PRIOR REFORM EFFORTS

Recommendations for fundamental intelligence reform--and
specifically, to create the equivalent of a strong National
Intelligence Director--date back decades. Aside from numerous books and
private-sector reports, 4

[Footnote] examples include:

[Footnote 4: Examples of private recommendations
include former DCI Admiral Stansfield Turner's 1985 book, Secrecy and
Democracy: The CIA in Transition, advocating creating a Director of
National Intelligence separate from the CIA director.]

In 1955, a commission chaired by former President Hoover
recommended that management of the CIA be turned over to an `executive
officer,' so that the DCI could focus attention on managing the
intelligence community.

In 1971, then Deputy OMB Director James Schlesinger submitted
a report to the President on the intelligence community criticizing the
failure to coordinate intelligence resources due to lack of a strong
central intelligence community leadership.

In 1995-96, the Aspin-Brown Commission and the House
Intelligence Committee undertook separate reviews of the intelligence
community in the post-Cold War environment. Both recommended
strengthening the DCI's ability to manage and coordinate the activities
of the intelligence community as a whole, including by separating the
DCI from running the CIA and providing the DCI with new authorities
over budgets and personnel. These recommendations led to some limited
reforms. 5

[Footnote]

[Footnote 5: These recommendations resulted in the
Intelligence Authorization Act of 1997, which created four
Senate-confirmed positions to enhance intelligence capabilities and
coordination. The Act also gave the Director of Central Intelligence
the right of concurrence in the Secretary of Defense's recommendations
for the directors of the National Security Agency and other
intelligence agencies in the Defense Department. But as the Commission
noted, `[T]he authority of these positions is limited, and the vision
of central management clearly has not been realized.' Commission
report, p. 357.]

More recently, the Joint Inquiry by the intelligence committees
of the House and Senate and the Senate Select Committee on Intelligence
conducted thorough investigations and recommended fundamental reform.
And finally, the Commission spent eighteen months investigating
intelligence lapses related to 9/11, among other topics. The
Commission's unanimous approval of its report, and its prioritization
of intelligence reform for immediate action, testify to both the wisdom
and urgency of transformational intelligence reform.

In short, the Collins-Lieberman National Intelligence Reform
Act represents the culmination of years of the most thorough and
extensive review of the intelligence community in history. Some of the
bill's most important measures draw upon intelligence reform proposals
and recommendation that long pre-date 9/11. For example, the concept of
creating the equivalent of a strong National Intelligence Director
dates back decades and reflects a longstanding concern that the
intelligence community lacks sufficient cohesion and management.

II. THE GOLDWATER-NICHOLS ACT OF 1986

The notion of a `Goldwater-Nichols for the Intelligence Community'
has been a recurring metaphor for intelligence reform since even before
9/11. Indeed, in 1992, Senator Boren and Representative McCurdy, then
the respective chairmen of the Senate and House intelligence
committees, proposed bills to restructure the intelligence community
modeled on the Goldwater-Nichols reorganization of the Defense
Department in 1986. The legislation would have created the equivalent
of a NID, separate from the CIA director, with authority to program and
reprogram funds throughout the intelligence community and to direct
their expenditure, to task intelligence agencies and to transfer
personnel temporarily from one agency to another. To understand this
parallel, it is helpful to present some background material on
Goldwater-Nichols.

The Goldwater-Nichols Department of Defense Reorganization Act
of 1986 moved the Department of Defense (DoD) from a 1950s-era
industrial, stovepiped model to a `matrix management' model of
integrating its vast array of capabilities to accomplish missions. The
Act is a model for restructuring intelligence not because intelligence
agencies should become a Department of Intelligence, equivalent to DoD.
Rather, Goldwater-Nichols is highly relevant to the intelligence reform
context because of the principles that underlay Goldwater-Nichols: that

good people cannot overcome bad structure on a consistent
basis, and that the aim of structural reform is to clarify
responsibility, authority, and accountability and to provide personnel
with the right incentives to develop the mindsets and organizational
culture for integrated operations.

The objective of Goldwater-Nichols was two-fold: (1) to improve
the quality of military advice given to the President, and (2) to
achieve greater integration among the Military Services.
Goldwater-Nichols was intended to transform DoD from a weak structure
dominated by the Military Services to an effective corporate entity.

A. The Origins of the Military Services

Warfare in the 19th Century and into the 20th Century was
cleanly divided between land and sea. As a result, the Army and the
Navy developed as separate Services with their own traditions and
processes. Cooperation between them was minimal. But warfare changed in
the middle of the 20th Century. The advent of the airplane added a
third medium of warfare. And warfare became a global endeavor--with
millions of Americans under arms, mobilization of America's industrial
might to field enormous amounts of equipment, and the need for grand
strategy against what at that time was considered a fast and agile
enemy. President Roosevelt created the Joint Chiefs of Staff, modeled
on the British system and composed of the heads of the Army and Navy in
order to coordinate among them. But military operations in World War II
evinced a lack of interservice coordination or `jointness.' For
example, the Army and the Navy had separate commanders in the Pacific
theater, leading to confusion and inefficiency.

B. Problems Leading To Passage of Goldwater-Nichols

After World War II, Congress passed the National Security Act of
1947 to establish the National Security Council (NSC), the Air Force as
a separate Military Service, and what eventually became the Central
Intelligence Agency and DoD. Congress's objective in passing the Act
was to create a national security establishment capable of fighting the
Cold War and to avoid another Pearl Harbor-like surprise attack. The
original defense department--called the Department of National Defense
by the National Security Act of 1947--was headed by a Secretary with
very weak authorities over the Military Services. Only two years later,
Congress passed legislation to strengthen the Secretary of Defense's
authorities over the Military Services and renamed the entity the
Department of Defense. Both Congress and the Executive Branch took
action over the ensuring forty years to strengthen the Secretary of
Defense's authorities over the Military Services.

One early attempt to integrate was the DoD's creation of the
Commanders-in Chief (CINCs) to command units from the Military Services
in wartime. DoD carved the world into commands, which were both
geographic (such as the European Command) and functional (the
Transportation Command). These commands were designed to prevent a
recurrence of divided command as in the World War II Pacific theater.
The CINCs were supposed to command all Military Service units assigned
to accomplish a particular mission--such as warfighting in Europe or
transportation. Thus a military unit such as the 82nd Airborne Division
would have two chains of command: (1) administrative control, under
which the 82nd Airborne was manned, equipped, and trained by the Army;
and (2) operational control, under which the 82nd Airborne was deployed
and conducted operations only at a CINC's direction.

Despite various attempts to achieve integration, by the early
1980s DoD was still dominated by the Military Services in two ways.

First, military advice to the President and the Secretary of
Defense was provided by the Joint Chiefs of Staff, a committee composed
of the heads of the Military Services (the Chief of Staff of the Army,
the Chief of Staff of the Air Force, the Chief of Naval Operations, and
the Commandant of the Marine Corps). The Joint Chiefs of Staff had a
Chairman, but he was very weak; instead, the Joint Chiefs of Staff as a
committee was responsible for rendering military advice.

The Joint Chiefs of Staff had a staff--the Joint Staff--to
assist it, but that staff was not manned by the Military Services' best
and brightest officers. Indeed, duty outside of one's Military Service
was the kiss-of-death for an officer's career. The Military Services
often sent lesser-quality officers to the Joint Staff and also
interfered to prevent the Joint Staff from producing recommendations
that were contrary to the Military Services' interests.

The result of the Joint Chiefs of Staff operating as a
committee and being served by a weak staff was that the Joint Chiefs'
military advice generally represented a lowest-common-denominator
approach among the Military Services. Over time, Secretaries of Defense
became unsatisfied with the quality of military advice from the Joint
Chiefs.

In addition to the lack of quality military advice, the
Military Services were unable to conduct integrated, `joint' military
operations successfully. The CINCs had weak authority, and--like the
Joint Chiefs of Staff's Joint Staff--the CINCs' staffs did not attract
the best-and-brightest from the Military Services. Moreover, officers
in each Military Service had little understanding of the other Services
and would approach issues not from the perspective of the corporate
Department of Defense but rather from the perspective of their
individual Service. Each Service's culture was insular and biased
against integration. There were no incentives for officers to think
`jointly' and every incentive for officers to prioritize their
Service's needs.

The net result was that the Military Services dominated
operations and impeded joint operations. Examples of disjointed combat
operations abounded: (1) the uncoordinated, four-part air war in
Vietnam, in which the country was divided into four quadrants and each
Military Service conducted air operations in its quadrant; (2) the
botched Iranian hostage rescue operation, in which each Military
Service wanted to have a `piece of the action'--leading to Air Force
pilots flying Navy helicopters loaded with Army troops; and (3) the
haphazard Grenada invasion, in which Army troops could not communicate
with Navy vessels to coordinate fire support from off-shore.

C. Passage of the Goldwater-Nichols Act

Critics of defense reorganization argued that DoD's problem was
not organization and that DoD just needed better people--that good
people could overcome bad structure. Yet Congress ultimately decided
that organizational structure mattered and that, while good people
could overcome a bad structure temporarily, they could not do so
consistently--nor should they have to.

The Goldwater-Nichols Act elevated the Chairman of the Joint
Chiefs to be the principal military adviser to the President and the
Secretary of Defense. While the Joint Chiefs as a committee was
preserved, the Act dictated that the Chairman--not the Joint Chiefs as
a committee--was responsible for giving military advice to the
President and the Secretary.

To strengthen the CINCs, Goldwater-Nichols did not mandate the
particular substantive focus of the CINCs--for example, that there be a
CINC for Europe or for South America. Goldwater-Nichols left that
decision to the Executive Branch, to create and adjust the CINC's
substantive foci as U.S. security dictated. But Goldwater-Nichols
specified in great detail that the CINCs had authoritative direction
over the Military Services for warfighting purposes and that the
Services could not carry out operations on their own. Thus
accountability was clarified: the CINCs were responsible for overall
strategy and operations to achieve missions.

Critics argued that strengthening of the CINCs would weaken the
Military Services. But that criticism assumed that the Military
Services were the key operating units of DoD. Instead, warfare in the
late 20th Century required integration of land, sea, and air forces,
which the Services could not accomplish on their own. As noted above,
the Military Services were responsible for administrative
control--recruiting, training, and equipping forces--while the CINCs
were responsible for using those forces in combat. As several military
operational fiascos demonstrated, the balance between the Services and
the CINCs was tipped toward the Services. Goldwater-Nichols sought to
right that balance by increasing the authority of the CINCs.

In addition to elevating the Chairman and strengthening the
CINCs, Goldwater-Nichols sought to change the military's
Service-specific culture and mentality over the long term. Of course,
legislation could not just order officers to `think joint'--or, as the
military would say, to `think purple.' Instead, the Act sought to
create incentives to motivate the best-and-brightest officers to serve
on the Joint Staff and CINCs' staffs and thus develop experience
outside of their Service. To create such incentives, the Act ventured
into the details of the military's personnel management system. The Act
required officers to serve on joint duty--that is, on the Joint Staff
or a CINC's staff--in order to be promoted to general or admiral. In
addition, the Act created a quota system to ensure that officers who
served on joint duty were promoted at the same or better rate as
officers who served in assignments simply within their respective
Services. Finally, the Act created a `joint specialty' by which
officers could choose to focus their career on serving in joint
assignments.

D. Goldwater-Nichols's Effect on the Department of Defense

Parts of the Goldwater-Nichols Act affected DoD almost
immediately--namely the elevation in the Chairman's status. The other
changes instituted by Goldwater-Nichols took longer to come to
fruition. The CINCs--renamed the Combatant Commanders by Secretary of
Defense Rumsfeld--have grown significantly in power within DoD.
Military operations have become more `joint' in nature. Most important,
DoD's culture is widely regarded as having changed from
Service-specific to joint. The Goldwater-Nichols personnel changes were
the driving force of this change. The effects of the personnel
requirements were not felt for over a decade, as a new generation of
officers developed and was forced to serve in joint assignments. But
the officer corps today is viewed as having a far more joint
orientation than previous generations. The Joint Staff and CINCs'
staffs are attracting the best and the brightest due to the promotion
requirement. In sum, Goldwater-Nichols is widely regarded as having
successfully effected a fundamental shift of power within DoD from the
Military Services to the CINCs in order to ensure the integration of
the Military Services to accomplish missions.

III. THE STRUCTURE OF U.S. INTELLIGENCE

The need for greater integration among intelligence agencies
parallels the problem that Goldwater-Nichols sought to resolve in the
DoD context: how to achieve greater integration among capabilities to
accomplish missions, and how to change organizational culture toward a
`joint' rather than capability-specific perspective. As the Commission
recorded:

Recalling the Goldwater-Nichols legislation of 1986, Secretary
Rumsfeld reminded us that to achieve better joint capability, each of
the armed services had to `give up some of their turf and authorities
and prerogatives.' Today, he said, the executive branch is `stove-piped
much like the four services were nearly 20 years ago.' He wondered
whether it might be appropriate to ask agencies to `give up some of
their existing turf and authority in exchange for a stronger, faster,
more efficient government wide joint effort.' Privately, other key
officials made the same point to us. 6

[Footnote]

[Footnote 6: Commission report, p. 403, endnotes omitted.]

Understanding the nature of the problem, and how the National
Intelligence Reform Act proposes to solve it, first requires an
overview of the intelligence community. As the Commission noted, `Over
the decades, the agencies and rules surrounding the intelligence
community have accumulated to a depth that practically defies public
comprehension.' 7

[Footnote]

[Footnote 7: Commission report, p. 410.]

Intelligence is created in a two-part process. First,
intelligence is collected from one or more of several sources: human
intelligence (spies); signals intelligence (intercepted
communications); imagery intelligence (photographs from the heavens);
open source intelligence (publicly available literature); and the
measurement of scientific data such as telemetry. Some

basic analysis is needed to process the collected material into
meaningful information. Second, the collected information, from all
sources, is analyzed by `all-source analysts' in order to produce a
comprehensive picture.

The Executive Branch is generally composed of basic building
blocks of departments and agencies. From that perspective, U.S.
intelligence is a strange hybrid, neither fish nor fowl. The National
Security Act of 1947 as amended creates the concept of the
`Intelligence Community,' composed of two actors who are independent
and many pieces of other departments. The Intelligence Community thus
is akin to a `virtual community,' lacking a physical structure but
composed of members from various departments.

The members of the Intelligence Community are:

(1) The Office of the Director of Central
Intelligence includes senior intelligence community officers (as
opposed to CIA officers), including the Deputy DCI for Community
Management and the Assistant DCIs for Collection, Analysis &
Production, and Administration. This office also includes the National
Intelligence Council and the Community Management Staff (which assist
the DCI in his capacity as head of the intelligence community). The
Office of the DCI is statutorily distinct from the CIA. The Terrorist
Threat Integration Center (TTIC) is also an independent entity,
separate from the CIA. These entities are also independent of any other
department;

(3) The National Security Agency (NSA), a DoD agency which collects signals intelligence;

(4) The National Geospatial-Intelligence Agency (NGA), a DoD agency which collects imagery intelligence;

(5) The National Reconnaissance Office (NRO), a DoD agency which builds satellites to support NSA and NGA;

(6) The Defense Intelligence Agency (DIA), a DoD agency
which serves DoD's departmental needs but also participates actively in
serving other customers and in the national estimate process;

(7) The intelligence components of the Federal Bureau of Investigation (FBI);

(8) The Bureau of Intelligence and Research in the
State Department, which serves State's needs for analysis but also
participates in the national estimate process;

(9) Elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information;

(10) Intelligence components of the Department of Energy;

(11) The Office of Intelligence and Analysis in the Treasury Department; and

(12) The intelligence components of the Military Services.

The National Security Act gives the Director of Central Intelligence
(DCI) three jobs. The DCI is the head of the Intelligence Community.
The DCI also is the principal intelligence adviser to the President and
the head of the CIA.

It is helpful to think of the intelligence apparatus as two
concentric circles. The larger circle is the Intelligence Community,
which is composed of the offices and organizations enumerated above.
The second, smaller circle within the larger circle is the National
Foreign Intelligence Program (NFIP), which is the budget program
formulated by the DCI for submission to the President and Congress. DoD
has its own intelligence budget programs: the Joint Military
Intelligence Program (JMIP), which includes intelligence assets that
serve DoD-wide customers; and the Tactical Intelligence and Related
Activities program (TIARA), which refers to the Military Services'
intelligence capabilities that are `in the trenches' and serving
warfighters on a tactical basis.

According to the National Security Act, the NFIP is a
collection of intelligence programs which are designated by agreement
between the DCI and the affected department. Thus the DCI and DoD
negotiate about which pieces of NSA, NGA, NRO, and DIA are to be paid
for by the NFIP and which by JMIP and/or TIARA. In essence, the NFIP
contains the CIA and the Office of the DCI and parts of NSA, NGA, NRO,
DIA, FBI, and other departments.

IV. THE NEED FOR INTEGRATION TO COUNTER 21ST CENTURY THREATS

The Intelligence Community was founded and structured to fight the
Cold War. The enemy in the Cold War was a lumbering and bureaucratic
behemoth, fielding a massive military backed by an equally massive
industrial complex. The main challenge for intelligence was to
penetrate the Iron Curtain to learn what was happening on the other
side. Intelligence collection therefore was all about learning the
enemy's secrets; open sources were less important because the Communist
bloc did not publish much useful information openly. The Intelligence
Community responded to the challenge of collecting on the other side of
the Iron Curtain by building large collection agencies.

By comparison to 21st Century challenges, each of human,
signals, and imagery intelligence collection could be done with
relative autonomy. The CIA, NSA, and imagery capabilities shared
information only via formal, finished reports. Each collection
capability acquired vast amounts of `raw data,' of which only a
percentage survived the process of sanding and smoothing the raw data
into finished reports. The counterintelligence threat was real, so
agencies adopted rigorous security policies to slow information-sharing
by keeping it within rigid regimes. And there was little need for
integration with the FBI aside from on counterintelligence, because the
main threat to the United States was a military force poised overseas.

But the nature of the threat changed in the 1990s. Al Qaeda is
not a lumbering, bureaucratic enemy fielding conventional armies.
Instead, it operates globally--in mosques,

universities, and back alleys--while being headquartered in
failed states like Afghanistan. It uses modern technology to
communicate and travel globally in service of centuries-old extremist
ideology. It can travel into the American homeland and strike with
daring, imagination, and surprise. And much more about it--and about
the Islamic extremist movement generally--is available via open
sources.

Given that the Intelligence Community was a 20th Century
creature chasing a 21st Century enemy, it was not surprising that the
Intelligence Community could not keep up before 9/11--as is chronicled
in the Commission's report. Gathering intelligence on terrorist cells
in the slums of Karachi and monitoring their connections to Kansas
requires far more intimate sharing of information among agencies.
Collection on terrorists is like a jigsaw puzzle without the box
cover--information must be shared at the raw data level because no
agency possesses all the pieces of the puzzle nor knows what the
picture on the box top looks like. The world's transition to `Internet
speed' makes sharing via formal reports an impediment to speedy action.
And the Intelligence Community downplayed open sources by focusing only
on `secrets.'

Indeed, as early as 1986, the Intelligence Community began to
recognize that transnational terrorism was a challenge to the
Intelligence Community's very structure. Following the terrorist
attacks on the Rome and Athens airports in 1986, the CIA formed the
Counterterrorist Center to overcome CIA's internal divide between its
human intelligence collectors and its analysts and the geographic
divisions in which its human intelligence collectors operated impeded
the CIA's actions against terrorism. The human intelligence collectors
at the Counterterrorist Center recognized that trying to recruit
terrorists required significant analytic support--more than recruiting
diplomats at the proverbial embassy cocktails parties. Thus the
analysts at the center became an integral part of human collection
activities--albeit at the expense of doing strategic analysis. 8

[Footnote]

[Footnote 8: Joint Inquiry Into Intelligence Community
Activities Before and After the Terrorist Attacks of September 11,
2001, Report of the U.S. Select Committee on Intelligence and U.S.
House Permanent Select Committee on Intelligence, Together with
Additional Views, S. Rep. No. 107-351, H. Rep. No. 107-792, 107th
Congress, 2d Session (December 2002) (hereinafter `Joint Inquiry
report'), pp. 60-61, 96, 551.]

The Counterterrorist Center's mission was eventually broadened
to integrating collection and analysis activities on terrorism across
the entire Intelligence Community. But as the Congressional Joint
Inquiry records, the Counterterrorist Center never fulfilled this
vision. The center did not become the Intelligence Community's leader
on counterterrorism. The center was physically housed at CIA and
essentially became a CIA organism. It never emerged as a body
independent from any agency with authoritative direction over all
intelligence agencies for the counterterrorism mission. Relations among
the CIA, NSA, and FBI left much to be desired and were anything but
seamless, against a foe for which integration of U.S. intelligence
capabilities was critical. 9

In the most classic example of the system's inability to
function against transnational terrorism, the Counterterrorist Center
lost track of future 9/11 hijackers Hazmi and Mihdhar as they traveled
across Asia and did not inform the FBI that these hijackers had U.S.
visas until it was too late for the FBI to catch them domestically.
Ultimately there was no accountability--the Counterterrorist Center,
NSA, and the FBI could all blame each other, and no one had the
responsibility and authority to make all intelligence capabilities work
together to accomplish the counterterrorism mission. The only place
where the counterterrorism activities of CIA, NSA, and other
intelligence agencies came together was at the level of the DCI. There
was no one lower--the equivalent of a DoD combatant
commander--responsible for fulfilling the counterterrorism mission by
developing strategy and unifying the intelligence community's array of
capabilities.

But the Counterterrorist Center failure to fulfill the vision
for it was a microcosm of the larger structural problems afflicting the
intelligence community. As the Commission notes, different personnel,
security, and technology standards prevented the Intelligence Community
from operating as a network to share information, particularly at the
raw data level. Security rules inhibited information-sharing; agencies
had rules that inhibited sharing, and there were no sanctions for not
sharing. Development of technology to facilitate information-sharing
was stunted, as agencies prioritized their own needs over the
Intelligence Community's corporate needs.

After 9/11, the Administration created the TTIC to integrate
analysis on the terrorist threat. TTIC exists outside of any
intelligence agency. TTIC represents a step forward in terms of
integrating information for analytic purposes. However, as the
Commission found, TTIC falls short of true intelligence community
integration because TTIC has no authority to order collection. Thus
TTIC has limited ability to task collectors to fill in gaps in
understanding regarding terrorism. 10

[Footnote] TTIC does not have its own career cadre and has had
difficulty in attracting analysts to come to TTIC from the
Counterterrorist Center and other parts of the Intelligence Community.
Finally, as the Commission found, there is no effective
counterterrorism planning function being done across the Executive
Branch.

[Footnote 10: Commission report, pp. 401-402.]

V. THE DCI'S LACK OF ADEQUATE AUTHORITIES TO TRANSFORM THE INTELLIGENCE COMMUNITY

The intelligence community must become an agile and flexible network
to fight terrorist networks. But the DCI currently lacks authority to
transform the intelligence community into a network and knit together
the disparate intelligence agencies. And the DCI is too burdened by
having to direct the CIA simultaneously, not allowing the DCI to focus
on community management.

A. Current DCI Authorities

The DCI has plenary authority over the CIA. In fact, the DCI has
extraordinary authority in this role as compared to the heads of other
departments and agencies. For example, the DCI can authorize CIA to
perform procurement without abiding by standard Executive Branch
procurement laws and regulations, and the DCI can terminate any CIA
employee at-will. In contrast to the DCI's clear authority over the
CIA, the question of whether the DCI already has adequate authority
over the Intelligence Community has been the subject of dispute.

The basic dilemma regarding the DCI's authorities is the extent
of DCI control over Intelligence Community entities contained in other
departments, particularly those in DoD, both on paper and in reality.
On paper, many of the DCI's authorities under the National Security Act
seem quite robust, including:

Collection tasking. The DCI establishes requirements
and priorities to govern the Intelligence Community's collection of
intelligence for `national' purposes.

Analysis and production. The Assistant DCI for
Analysis and Production is given the authority to `oversee' and
`establish standards and priorities' for the analysis and production of
intelligence.

Providing services of common concern. The DCI
performs services of common concern that the DCI determines are more
efficiently accomplished centrally, including to consolidate personnel,
administrative, and security programs across the Intelligence
Community.

Coordinating intelligence liaison. The DCI coordinates the relationships of Intelligence Community entities with foreign intelligence or security services.

Access to intelligence across the Executive Branch. To
the extent recommended by the NSC and approved by the President, the
DCI has access to all intelligence related to national security which
is collected by an Executive Branch component.

But the above-referenced authorities do not give the DCI actual
levers to control the actions of Intelligence Community entities aside
from the CIA. The DCI's main levers for enforcing his will on
intelligence agencies are as follows:

Budget authority. The DCI develops the budget for the
National Foreign Intelligence Program and presents it to the President
for submission to Congress. In developing the budget, the DCI provides
guidance to intelligence agencies in formulating the parts of their
budgets that are included in the NFIP. Thus the DCI could theoretically
refuse to put an agency's budget into the NFIP unless that agency
abided by the DCI's wishes.

Transferring funds. Subject to the approval of the
Office of Management and Budget, the DCI may only transfer funds
appropriated to one account within the NFIP to another account within
the NFIP if the secretary of the affected department does not object.
The DCI cannot transfer any funds from the FBI. The DCI could
theoretically attempt to attain the affected secretary's approval for
such a transfer. However, currently it takes the DCI, on average, three
to five months to transfer appropriations; this simply does not provide
the DCI with the agility to respond to rapidly changing circumstances.

Transferring personnel. The DCI may transfer
personnel within the Intelligence Community only if the secretary of
the affected department does not object. The DCI cannot move personnel
from the FBI. As regarding the transfer of funding, the DCI could
theoretically attempt to attain the affected secretary's approval for
such a transfer, but in practice the process is cumbersome and not
compatible with the Intelligence Community becoming an agile network.

Hiring senior intelligence managers. The Secretary of
Defense is required to seek the DCI's concurrence before recommending
to the President an individual for appointment to head NSA, NGA, and
NRO. However, the Secretary of Defense may forward the recommendation
to the President without the DCI's concurrence, although the Secretary
must inform the President of the DCI's nonconcurrence. The DCI is
merely consulted by the relevant department head in the selection of
the Assistant Secretary of State for Intelligence and Research, the
head of DIA, and the head of the Energy Department's intelligence
office. The DCI is merely given timely notice by the FBI Director of
the selection of an individual to head the FBI's intelligence
component.

The question, then, is whether the NID needs additional
authorities beyond the DCI's current authorities in order to manage the
Intelligence Community effectively.

B. DCI Tenet's 1998 Declaration of War

The best example of the institutional weakness of the DCI is DCI
Tenet's ill-fated declaration of war against al Qaeda. In December
1998, DCI George Tenet issued a memorandum declaring that the
Intelligence Community was at war with al Qaeda and that no resources
should be spared in the effort. But nothing happened as a result. The
NSA director told the Congressional Joint Inquiry that he did not think
that the memorandum applied to NSA. In contrast, individuals at CIA
thought that the memorandum applied to the rest of the

Intelligence Community and not them. There was little focus
across the Intelligence Community on developing capabilities over the
long term against the terrorist threat. 11

[Footnote]

[Footnote 11: Commission report, p. 358.]

Some argue that DCI Tenet did not attempt to implement his
declaration of war memorandum, such as by developing a Community-wide
counterterrorism strategy that focused on breaking down barriers to
information-sharing and building long-term capabilities. Indeed, DCI
Tenet apparently did not contact the NSA director after issuing the
declaration of war memorandum to assess NSA's counterterrorism
performance--which would have clarified to the NSA director that the
memorandum was indeed intended for NSA.

Ultimately, however, the Commission's decision based upon its
analysis is that, regardless of whether DCI Tenet could have taken some
steps to implement his declaration of war, the position of DCI is so
institutionally weak that DCI Tenet lacked the necessary levers to
ensure compliance. The Commission argues that the DCI is an
institutionally weak position because the DCI lacks two key authorities
that any business person would consider necessary to run a business:
the purse strings, and the ability to hire and fire key subordinates.
And by virtue of being an institutionally weak position, DCIs have
historically not exploited and in effect have waived their other
authorities.

C. The DCI and the Intelligence Appropriation

According to the Commission, the DCI's current authority to
develop the NFIP budget does not constitute real control over NFIP
funding. Instead, the DCI is institutionally weak because the DCI does
not receive the intelligence appropriation from Congress. Most of the
intelligence appropriation is contained within the Defense
Appropriations Bill. By doing so, the top-line intelligence
appropriation remains secret. As a result, the Secretary of Defense
receives the appropriation for NSA, NGA, NRO, DIA, CIA, and the
Community Management Account (which includes the Office of the DCI, and
some funding for the National Intelligence Council, the Community
Management Staff, and the TTIC). The Secretary of Defense mechanically
transfers the appropriations for the Community Management Account and
the CIA to the DCI but administers the NSA, NGA, NRO, and DIA
appropriations himself. The appropriation for the FBI's intelligence
component is given to the Attorney General, not the DCI, in a separate
appropriations bill.

The receipt of an appropriation is important for three reasons:

(1) It is emblematic in the Executive Branch of which officials
are truly powerful and which are merely advisory. As former President
and CEO of Lockheed Martin, Norman Augustine, wrote regarding power in
the federal government, `As in business, cash is king.' Because the DCI
does not receive the intelligence appropriation, the DCI has diminished
stature.

(2) Receipt of the appropriation brings with it the power of
apportionment. The recipient of the appropriation can use the process
of apportioning the appropriation to various sub-entities as a means of
control. Currently, DoD has that power over NSA and other Defense
intelligence entities.

(3) Receipt of an appropriation brings with it certain
fiduciary duties, namely to track the obligation and expenditure of the
funding by sub-entities. If the DCI were able to `execute' the budget,
then the DCI would not only have a window into how intelligence
agencies are spending their money but also would know what funds have
been obligated yet not expended--and thus are available for
reprogramming to meet emergency needs. Currently, the DCI has little
insight into how intelligence agencies aside from CIA are spending
their funds. An official could theoretically receive execution
authority without receiving the relevant appropriation, but Executive
Branch officials have told us that such a situation creates a mess and
essentially is not good government.

As the Commission records, before 9/11 the CIA and the Air
Force squabbled regarding the deployment of the Predator unmanned
aerial vehicle because neither wanted to be stuck with the $3 million
bill should the Predator be lost. The image of the DCI apparently being
unable to find $3 million in the NFIP to fund a Predator to be used
against Osama bin Ladin is a sobering indictment of the current state
of the DCI's financial management of the intelligence community. 12

[Footnote]

[Footnote 12: Commission report, p. 211.]

D. Integration Requires Centralized Authority

The justification for giving the National Intelligence Director
strong authorities derives directly from what the NID is supposed to
accomplish in practice. The Intelligence Community has failed to
transform itself into a network in which information and personnel can
move seamlessly across the Community. Instead, security prohibitions,
personnel regulations, and information technology disjunctions prevent
the Intelligence Community from becoming a decentralized network. And
the reason that security, personnel, and information technology
policies obstruct intelligence transformation is that the DCI lacks the
authority over the component agencies to break stovepipes and enforce
common protocols. The objective of giving the NID greater authority is
not to centralize operations at the level of the NID but rather to have
the NID set and enforce the common personnel, security, and information
technology standards and protocols to transform the Intelligence
Community into a network to facilitate decentralized operations.

VI. CREATING A NATIONAL INTELLIGENCE DIRECTOR TO INTEGRATE INTELLIGENCE CAPABILITIES

Intelligence transformation is needed to enable the intelligence
community to counter 21st Century national security threats--epitomized
by transnational and suicidal terrorists who target

the American homeland--that require a quantum leap in U.S.
intelligence agencies' ability to integrate their efforts and share
information. That transformation can only occur if the new National
Intelligence Director receives strengthened authority to bridge agency
stovepipes and knit intelligence agencies into a network. With this aim
in mind, the legislation provides the National Intelligence Director
with a robust and carefully crafted series of authorities.

A. The National Intelligence Program

Pursuant to the Commission's recommendation, the bill renames
the NFIP as the National Intelligence Program (NIP). The new name
expresses the need for intelligence collection and analysis to cross
the foreign/domestic divide given the nature of the transnational
terrorist threat. It also preserves the concept that only `national
intelligence'--pertaining to the interests of more than one government
agency or department--is included in the NIP. The bill defines national
intelligence as intelligence that serves more than one department.

The bill significantly changes the definition of the National
Foreign Intelligence Program. The NIP is defined to include all
programs, projects, and activities (whether or not pertaining to
national intelligence) of the National Intelligence Authority, the
Central Intelligence Agency, the National Security Agency, the National
Geospatial-Intelligence Agency, the National Reconnaissance Office, the
Office of Intelligence of the Federal Bureau of Investigation, and the
Office of Information Analysis of the Department of Homeland Security.
The NIP also includes all national intelligence programs, projects and
activities of the elements of the intelligence community and any other
program, project, or activity of a department, agency or element of the
United States Government relating to national intelligence unless the
NID and the head of the affected entity determine otherwise. These
provisions ensure that the NID will have complete budgetary control
over the core elements of the intelligence community which produce
national intelligence.

The NIP definition specifically excludes programs, projects and
activities of the military departments that acquire intelligence
principally for the planning and conduct of joint or tactical military
operations by the United States Armed Forces. Any assets that are
currently in the JMIP but are national and do not acquire intelligence
principally for the planning and conduct of joint or tactical military
operations by the United States Armed Forces should be moved to the
NIP. The inclusion of the word `principally' is meant to reflect that
some military assets serve both national and tactical or joint
purposes; the mere fact that a DoD asset produces some national
intelligence thus does not require that asset to be moved to the NIP.

Any programs, projects, or activities in DIA that are not part
of the NFIP as of the date of the legislation's enactment would not be
part of the NIP. This provision is meant to ensure that certain DIA
assets are not moved to the NIP. It should be noted that the
Commission's report calls for DIA to be included in the NIP, but the
Committee disagreed with this recommendation. Still, it is expected
that national collection done by DIA will be moved to the NIP.

The State Department's Bureau of Intelligence and Research and
similar offices in the Departments of Energy and Treasury would likely
not be part of the NIP because of their largely departmental rather
than national focus. These entities focus on analysis, not collection
activities; on the other hand, the NID would ensure that these
entities' analytic expertise is solicited when the Intelligence
Community is producing national intelligence estimates or analysis on
important national security topics.

B. The NID's Responsibilities

The NID is responsible for serving as the head of the
intelligence community, as the principal adviser to the President for
intelligence related to the national security, as the head of the
National Intelligence Authority, and for directing and overseeing the
National Intelligence Program.

The NID is also responsible for providing national intelligence
to the President, the heads of executive branch departments and
agencies, the Chairman of the Joint Chiefs of Staff and other senior
military commanders, the Senate, House of Representatives, and their
committees, and to other people and entities as directed by the
President. The national intelligence provided by the NID is to be
timely, objective, independent of political considerations, and based
upon all sources available to the intelligence community.

The NID is given a number of specific responsibilities. Many of
these responsibilities are new, and are intended to address
shortcomings the Committee perceived in the existing responsibilities
of the Director of Central Intelligence.

The NID is clearly given the responsibility to determine the
annual budget for intelligence and intelligence-related activities of
the United States, and for managing and overseeing the National
Intelligence Program. The NID is also given greater responsibility to
oversee the collection, analysis and dissemination of intelligence. The
NID is required to establish the requirements and priorities to govern
the collection, analysis, and dissemination of national intelligence,
and to establish collection and analysis requirements for the
intelligence community, and for determining collection and analysis
priorities, issuing and managing collection and analysis tasking, and
resolving conflicts in tasking of elements of the National Intelligence
Program.

As is the DCI under current law, the NID is also responsible
for establishing requirements and priorities for foreign intelligence
collected under the Foreign Intelligence Surveillance Act, and for
assisting the Attorney General in ensuring that intelligence derived
from surveillance and searches under FISA is appropriately
disseminated.

Finally, the NID is responsible for providing advisory tasking
on the collection of intelligence to elements of the U.S. government
having information collection capabilities, but which are not members
of the intelligence community. This responsibility is critical because

information relevant to terrorism can be found throughout the
government--hypothetically, from surveillance data at government
buildings, to border and customs officers' observations, to immigration
statistics.

The NID is responsible for managing and overseeing the National
Counterterrorism Center and other national intelligence centers which
may be established in the future. The NCTC is critical to fulfilling
the 9/11 Commission's vision of unity of effort in the intelligence
community and across the Executive Branch against terrorism, while the
national intelligence centers are meant to unify intelligence
activities against NSC priorities. The NID is responsible for ensuring
that the NCTC and the national intelligence centers fulfill their
intended purposes.

The NID is also charged with developing personnel policies and
programs to make a number of improvements in the management of the
intelligence community. These responsibilities include setting
standards for education, training, and career development across the
intelligence community, and ensuring that the personnel of the
intelligence community are sufficiently diverse for the purposes of
collection and analysis of intelligence. The NID is also responsible
for facilitating assignments to the NCTC and other national
intelligence centers that may be established in the future, and for
making service in more than one element of the intelligence community a
condition of promotion to certain positions within the intelligence
community. Such policies will help promote the concept of `jointness'
in intelligence collection, analysis, and operations. Generally
speaking, the NID is responsible for creating an intelligence workforce
and intelligence capabilities necessary to meet 21st Century threats.
As with Goldwater-Nichols, this is a long-term process. It is the NID's
responsibility to ensure that it happens.

The NID is given responsibilities for facilitating the
dissemination of intelligence, while still protecting classified
information. A key responsibility within this general area is
developing an integrated, interoperable communications network between
intelligence community elements. This responsibility is critically
important in fulfilling the 9/11 Commission's mandate to bring national
security institutions into the information age.

The Committee is aware that there is a considerable potential
for duplication of effort as a number of agencies make efforts to
address common problems without the benefit of a strong NID to
coordinate their activities. Likewise, certain problems can remain if
no agency addresses them. Therefore, it is possible that the NID might
discover duplication of effort or gaps in the intelligence community
that the NID should address through budget, personnel, and other
authorities.

The legislation strengthens the Intelligence Community's
ability to exploit open sources by requiring the NID to establish and
maintain within the intelligence community an effective open-source
information capability.

Finally, the bill makes clear that the NID must ensure that the
elements of the intelligence community are complying with the
Constitution and all applicable laws and executive orders, including
those relating to privacy and civil liberties of U.S. persons.
Effective intelligence activities cannot come at the expense of civil
liberties.

C. The NID's Authorities

The legislation sets forth a wide range of authorities for the
NID to fulfill his responsibilities. The Committee believes that these
authorities are commensurate with the NID's responsibilities.
Accordingly, the NID is accountable for the performance of the
responsibilities assigned to him. This alignment of responsibility,
authority, and accountability is necessary in order to remedy the
current arrangement in which the DCI's authorities fall far short of
his responsibilities as head of the intelligence community. The
enumeration of the NID's authorities is meant to resolve the problem
identified by the Commission, that no one is in charge of the
intelligence community.

1. Authority To Formulate the Budget

The NID will be responsible for developing, with advice from the
heads of elements of the NIP, the budget for the NIP. The NID will
formulate the content, amount, and distribution of the budget for the
NIP and present that budget to the President for consideration. Upon
submission of the President's budget request to Congress, the NID and
the Deputy NID will testify to Congress to defend the budget and will
make such officials of their staff available to Congress for briefings
and to provide other information as appropriate. The NID is expected to
utilize this budget preparation authority in order to effect changes,
if needed, in component agencies' programs and activities. The NID
should not merely mechanically compile the agencies' budgets but should
ensure that the budgets achieve integration, prevent unnecessary
duplication among agencies, and maximize the effectiveness of all of
our intelligence capabilities.

2. Authority To Receive the National Intelligence Program's Appropriation

The Committee's legislation provides that funds for the NIP will
be appropriated to the National Intelligence Authority and will be
under the direct jurisdiction and control of the NID. The NID would
allocate the appropriated amounts, after apportionment by the Office of
Management and Budget, directly to the heads of Intelligence Community
components, consistent with his budget request as modified by the
classified annexes that would accompany appropriations and
authorizations. The authority to allot NIP appropriations will provide
the NID with the ability to control and closely monitor the obligation
and expenditure of NIP funds. For example, the NID will have insight
into what funds have been obligated and not expended, making those
funds available in the short-term for application to different
priorities.

3. Authority To Transfer Intelligence Funds

The legislation provides the NID with flexibility to reallocate
funding after Congress provides annual appropriations for the NIP.
After approval by the Office of Management and Budget, and notification
of the appropriate congressional committees, the NID may transfer
appropriations and personnel among components of the NIP. The NID may
also approve reprogramming of appropriations within NIP components.
These authorities will help the NID respond to changing events by
shifting resources to higher priority activities, while providing for
appropriate notification of Congress.

The Commission stresses the importance of the NID having what
the Commission calls `the ability to hire or fire senior managers.' The
Commission states that the NID should `approve and submit nominations
to the President' of the heads of the CIA, DIA, FBI Office of
Intelligence, NSA, NGA, NRO, the Department of Homeland Security's
Directorate for Information Analysis and Infrastructure Protection
(`IA&IP'), and `other national intelligence agencies' unspecified
by the Commission. 13

[Footnote]

[Footnote 13: Commission report, p. 410.]

The Committee recognizes the importance of this authority. Using
this authority, the NID will be able to set expectations and
performance metrics for senior intelligence managers as a condition for
his recommendation of them for appointment or nomination. However, the
Committee's legislation takes a slightly different approach than the
Commission.

The NID is responsible for recommending to the President
nominees to be the Directors of the NSA, NGA, and NRO. The NID is
required to seek the concurrence of the Secretary of Defense in these
recommendations. If the Secretary of Defense does not concur, that fact
must be made known to the President. The NID is responsible for
recommending a nominee for CIA Director to the President.

The bill also requires that the relevant department heads seek
the concurrence of the NID prior to recommending nominees for the
positions of Under Secretary of Defense for Intelligence, Assistant
Secretary of Homeland Security for Information Analysis, Director of
the DIA, and Executive Assistant Director for Intelligence of the FBI.
If the NID does not concur in these recommendations, it must be made
known to the President.

The NID is also given the right to recommend to the President
that the individuals serving in any of the positions described in the
preceding two paragraphs be terminated. The NID must seek the
concurrence of the relevant agency head prior to making such a
recommendation but may make it without the concurrence, provided the
President is notified of that fact.

5. Acquisition and Fiscal Authorities

The legislation establishes for the NID enhanced acquisition
authority similar to that of the DCI, as head of the CIA. It also
requires the NID to establish a major system acquisition management
framework similar to that utilized by DoD for defense acquisition
programs, and provides that ultimately the NID will assume milestone
decision authority for major systems acquisitions funded by the
National Intelligence Program (NIP).

a. The NID's Inherent Acquisition Authority.--As a
general matter, the U.S. government has inherent contracting authority
to enter into agreements necessary to procure goods and services
necessary to its functions. Statutes governing the conduct of
procurements by executive agencies establish the framework for this
authority. More explicitly, the creation of the NIA as an independent
establishment within the executive branch places it squarely within
applicability of the Federal Property and Administrative Services Act
of 1949 (FPASA, 41 U.S.C. Sec. 251 et seq.). This Act establishes
competition requirements as well as other procurement procedures and
requirements. These include the requirements of the Competition in
Contracting Act of 1984 and the Truth in Negotiations Act, both of
which amended FPASA. 41 U.S.C. 252 provides that executive agencies
shall make purchases and enter into contracts in accordance with the
provisions of FPASA. The NIA, as an independent establishment, is
included within the definition of executive agency. Further, the Office
of Federal Procurement Policy Act (41 U.S.C. 401 et seq.) establishes
requirements for the implementation of government wide procurement
policy (such as the Federal Acquisition Regulation) over executive
agencies, which include the CIA and, by application of law, the new
NIA.

Like the CIA, though, it is anticipated that contingencies will
arise where provisions of current Federal acquisition law could hinder
the NID's ability to accomplish the mission of the National
Intelligence Authority (NIA). Therefore, the NID is provided expanded
authorities not given to most other agencies as described below.

b. Special Acquisition Authority Similar to CIA.--The
section provides the NID with special acquisition authority similar to
the CIA in two specific ways. First, it provides the NID with authority
identical to some of the authority in what is known as the CIA's
`Section Eight' authority. Next, it provides him with what is known as
`impairment authority.'

The NID has the same flexibility already provided the CIA (sec.
8(a) of the CIA Act of 1949, as amended, 50 U.S.C. Sec. 403j(a)) for
the purposes for which funds may be expended. Specifically, the CIA has
flexibility to expend funds for purposes that may be prohibited or
limited for other agencies, such as personal services. Thus, similar to
the CIA, the NID would be authorized to expend sums under contracts the
NIA awards for these purposes.

Next, the CIA is among a small number of entities in the
Federal government for which the application of FPASA requirements may
be made inapplicable under 40 U.S.C. Sec. 113(e) when strict adherence
would impair its ability to fulfill its mission. Several fundamental
federal procurement laws, such as the Competition in Contracting Act
and the Truth in Negotiations Act are amendments to FPASA. With the
impairment authority, these requirements may be considered inapplicable
if circumstances warrant. In extending this authority to the NIA, the
Committee expects the NIA, as with the CIA, to conduct procurement
activities to the maximum extent practicable in accordance with general
Federal Government procurement statutes and the Federal Acquisition
Regulation.

c. Milestone Acquisition Authority.--The legislation
confers on the NID certain acquisition authorities over NIP-funded
acquisitions of major systems. These authorities are modeled on those
now exercised by DoD. Specifically, a combination of Federal law and
DoD policy gives DoD the power to exercise what is known as `milestone
authority' over the acquisition programs of all DoD agencies. This
means that for large procurements (e.g., those in excess of $140
million for R&D purposes or $660 million for actual procurement)
high-level DoD officials independent of the program office developing a
system approve the entry into the next phase of the acquisition cycle
(such as from system development and demonstration to production), as
well as for production and deployment of the system. These officials
have access to independent assessments of program progress such as cost
estimates, testing results, etc.

The legislation requires the NID to establish a management
structure for acquisitions of major systems funded by the NIP. A
program management plan will be established with cost, schedule, and
performance goals as well as progress reviews and reports to Congress
on the development of these programs. The section would also require
that the NID serve as the exclusive milestone decision authority for
all programs funded by the NIP, including those of other agencies such
as DoD, in order to ensure strategic focus, interoperability, and any
necessary uniformity in development. DoD would retain milestone
authority over NSA, NRO, and NGA until such time that the NID was fully
prepared to assume it. The NID could also assign milestone authority to
the Secretary of Defense in particular instances, pursuant to a
memorandum of understanding.

The section would also require the NID to prescribe guidance on
program management plans based on the principles of knowledge-based
system development established in Defense Department acquisition system
guidance and espoused in the system development `best practices'
reports of the U.S. Government Accountability Office.

d. Acquisition Powers Report.--The bill requires the NID to report in a year as to whether any acquisition authority enhancements are needed by NSA and NGA.

e. GAO Review.--Finally, not later than 2 years after
the date of enactment of this Act, the Comptroller General shall report
to the Congress on the extent to which the policies and processes
adopted for managing major national intelligence acquisitions, as
defined by the Director, are likely to result in successful cost,
schedule, and performance outcomes.

6. Tasking Authority

The NID is given tasking authorities comparable to--but stronger
than--those that the DCI or Assistant DCIs currently have. The
legislation gives the NID tasking authority not just for collection but
also for analysis. Intelligence analysis must be directed to focus on
national security priorities. Also, as the Commission specifically
noted, `The limited pool of critical experts--for example, skilled
counterterrorism analysts and linguists--is being depleted. * * * The
U.S. government cannot afford so much duplication of effort. There are
not enough experienced experts to go around.' 14

[Footnote] Under the bill, the NID will be empowered to
rationalize all assets--including analysts. The Committee is concerned
about issues of analytic quality and objectivity and addressed these
concerns in other sections of the legislation (see section XI below).

[Footnote 14: Commission report p. 401.]

7. Reorganization Authorities

Improving intelligence capabilities may require altering or
consolidating organizational units in order to overcome agency
stovepipes, remedy unnecessary duplication, and promote economies of
scale. To this end, the NID is authorized, with the approval of the
President and after consultation with the department, agency, or
element concerned, to allocate or reallocate functions among the
officers of the NIP, and to establish, consolidate, alter, or
discontinue organizational units within the NIP. Prior to such action,
the NID shall provide notice to Congress, which shall include an
explanation of the rationale for the action. The authority under this
section does not extend to any action inconsistent with law, and an
action may be taken under this authority only with the approval of each
of the congressional intelligence committees, the Senate Committee on
Governmental Affairs, and the House Committee on Governmental Reform.

VII. CHANGING ORGANIZATIONAL STRUCTURES

A. The NID

The NID is to be Presidentially-appointed and Senate-confirmed.
The position of NID is at the Executive Level I pay grade, equivalent
to that of a department head. The bill does not make the NID a member
of the cabinet. Members of the cabinet generally are heads of executive

departments who are executing policy. The NID plays a different
role, which is to support policymaking with objective intelligence.

The NID serves at the pleasure of the President. The
Committee--like the Commission--rejected giving the NID a fixed term.
The NID is the President's principal intelligence adviser and needs to
have the confidence of the President. Testimony before the Committee
made clear that instituting a fixed term for the NID would interfere
with if not preclude that relationship. Moreover, having the
President's confidence is a critical element for the NID to be
effective in translating his authorities into compliance by the
intelligence agencies--particularly when the new structure is in its
infancy.

The bill expressly prohibits the office of the NID from being
placed in the Executive Office of the President. The Commission had
advocated doing so, apparently to facilitate the development of a
strong relationship between the NID and the President. However, the
location of the NID in the Executive Office of the President is
irrelevant to the establishment of such a relationship. The Committee
is concerned that locating the NID in the Executive Office of the
President might lead to the politicization of intelligence. Testimony
before the Committee supported the Committee's views on this issue.
Moreover, it appears that the Commission has conceded this point. 15

The Committee solicited testimony and advice from a wide variety
of experts both within and without the intelligence community regarding
how the NID's deputy structure should be established in statute. These
experts provided the Committee with a variety of interesting, though
not necessarily consistent, approaches. However, one common thread the
Committee identified was that the NID should be given the flexibility
to establish a deputy structure consistent with the NID's vision for
the National Intelligence Authority. The Committee adopted a
legislative approach that provides such flexibility.

The legislation creates a Principal Deputy NID, to serve in the
NID's absence. This official will be Senate-confirmed. Having such an
official is critical to the effectiveness of the NID. Indeed, one of
the Goldwater-Nichols Act's provisions designed to strengthen the
chairman of the Joint Chiefs was to create the position of the Vice
Chairman, to serve in the Chairman's absence and to ensure continuity.

The legislation permits the NID to create up to four deputies
who are not Senate-confirmed and to determine their duties and
authorities. Thus the NID will have the flexibility to structure
top-level management as the NID sees fit.

The Commission recommended creating three Deputy NIDs with line
authority over key agencies/components under the NID's authority: (1) a
Deputy NID for Foreign Intelligence, to head the CIA; (2) a Deputy NID
for Defense Intelligence, to oversee NSA, NGA, and NRO; and (3) a
Deputy NID for Homeland Intelligence, to address the Department of
Homeland Security's IA&IP Directorate and the FBI Office of
Intelligence. The Commission would have made the Undersecretary of
Defense for Intelligence (USDI) the Deputy NID for Defense
Intelligence.

Testimony before this Committee was unanimous that dual-hatting
the USDI would not work in practice. The USDI would have two masters,
inside and outside the Department of Defense. Moreover, the USDI
currently is a DoD policy official and lacks line authority over NSA,
NGA, and NRO in DoD today; thus the Commission's proposal to give the
USDI line authority over these agencies actually requires strengthening
the USDI's authorities. Indeed, the Commission no longer supports
giving the USDI line authority over NSA, NGA, and NRO.

The Committee also has concerns about the Deputy NID for
Homeland Intelligence, who would be either the Undersecretary of
Homeland Security for IA&IP or the head of the FBI Office of
Intelligence. This formulation leads to the awkward structure under
which a Department of Homeland Security official has line authority
over an FBI official, or vice versa.

C. The Office of the NID

The Commission does not specify what positions should be created
in the Office of the NID to assist in managing the National
Intelligence Program. However, the authorities of the NID arguably
require a basic list of officials common to most Executive Branch
entities. These officials should not also be officials within the
intelligence agencies themselves; in contrast, today the DCI's general
counsel is also the CIA's general counsel, leading to an inherent
conflict of interest when the DCI has to resolve an issue between the
CIA and another intelligence agency. The officials needed by the NID
include:

(1) A general counsel, to advise the NID regarding
his or her authorities and to resolve legal disputes among component
agencies on issues such as information-sharing;

(2) A comptroller, to act in conjunction with the chief
financial officer (CFO) to assist the NID in executing the NIP
appropriation;

(3) A chief information officer, to assist the NID in setting standards for information technology and network architecture;

(4) A civil rights and civil liberties officer;

(5) A privacy officer; and

(6) A CFO.

(4) It should be noted that the CFO will be subject to the Chief
Financial Officers Act under title 31 of the U.S. Code. As required by
the CFO Act, the CFO will oversee all financial management activities
relating to the NIA's programs and operations. The NID will be
responsible for development and maintenance of an integrated agency
accounting and financial management system. In addition, the NID will
direct and oversee the NIA's financial

management personnel, activities and operations. The Committee
believes that including the CFO in the CFO Act is in keeping with a
growing trend towards emphasizing the importance of integrating
financial management best practices in agency management.

The legislation also creates an inspector general to monitor,
inspect, and audit, and, where appropriate, investigate activities
within the Office of the NID, the NCTC, the centers, and the
interstices among the elements of the intelligence community.
Currently, there is no inspector general with plenary authority to
investigate interagency cooperation. Thus there is no inspector general
with clear authority to investigate the information-sharing problems
among agencies that contributed to the failure to prevent the 9/11
attacks. This situation has not been conducive to maximizing
performance in the intelligence community. The NIA inspector general
would not have jurisdiction over the internal operations of the
intelligence agencies and thus would not duplicate the activities of
their inspectors general.

D. The National Intelligence Authority

The Office of the NID, the NCTC, and the national intelligence
centers shall be housed within the National Intelligence Authority. In
addition, the legislation moves the National Intelligence Council into
the NIA.

The Council is currently responsible for coordinating and
producing national intelligence estimates. The Council will continue to
do so. National intelligence estimates will generally be formulated by
analysts from the relevant national intelligence center, the Bureau of
Intelligence and Research, and DIA, as well as other departmental
offices with relevant expertise. In addition, the drafting of the
President's Daily Briefing shall be done within the NIA, based in large
part on input from the national intelligence centers.

The National Intelligence Director, like the head of any other
agency in government, will have responsibility for managing the
personnel of the National Intelligence Authority. To assist the NID
with these workforce management responsibilities, section 163 of the
legislation grants the NID the authorities currently available to the
Director of the CIA with respect to CIA personnel.

The legislation makes clear that employees and applicants for
employment at the NIA will have the same rights and protections under
the Authority currently afforded to employees of the CIA. Thus, for
example, the employees of the NIA, like those at the CIA, will have
generally the same rights and remedies in cases of alleged
discrimination on the basis of race, color, religion, sex, national
origin, age, or handicapping condition as employees at other federal
agencies, including the right to appeal to the EEOC and to federal
courts.

The Committee is cognizant, however, that employees at the CIA,
like most employees throughout the intelligence community, do not have
external appeal rights to the Merit Systems Protection Board or review
in court for the majority of adverse actions. With respect to adverse
actions, the Committee believes that it is important that NIA employees
receive, at a minimum: advance written notice of such action; a
reasonable opportunity to respond; the opportunity to seek the advice
of private counsel; an opportunity to obtain specific information on
which the action is based, provided the receipt of such information
would not violate the national security interests of the United States;
and the right to appeal to an independent internal panel. The Committee
believes it is important that the NID consider adoption of the system
in place within the CIA, to ensure that NIA employees can carry out
their duties in the interest of the United States with assurance that a
fair process is available should any unlawful or unfair workplace
practices occur.

The legislation authorizes the NID to create national intelligence
centers to provide for unified direction of intelligence
agencies/components in the NIP to fulfill missions. The Commission's
recommendation stems from the pre-9/11 and current situation in which
no one below the DCI is responsible for how CIA, NSA, and other
intelligence agencies work together on a specific issue. For example,
in the area of counterterrorism, as recognized by the Congressional
Joint Inquiry and the Commission, the DCI's Counterterrorist Center is
an organ of the CIA and concentrates on human intelligence rather than
on organizing and integrating the actions of agencies with
counterterrorism responsibilities across the government.

Senior intelligence officials, including former DCI Tenet, have
endorsed the concept of integrating intelligence assets in a
mission-specific orientation. 16

[Footnote] The legislation does not specify the centers'
topics; instead, the NID would establish the centers on topics
reflecting functional and geographic NSC priorities--such as
counterproliferation, Russia, and East Asia & China. If a center is
no longer needed, the bill allows the NID to terminate a center,
subject to Congressional notification.

[Footnote 16: Larry Kindsvater, `The Need to
Reorganize the Intelligence Community,' in Studies in Intelligence,
Vol. 47, no. 1 (2003). Kindsvater was subsequently confirmed as the
Deputy DCI for Community Management. For DCI Tenet's statement, see Law
Enforcement and the Intelligence Community, hearing before the National
Commission on Terrorist Attacks Upon the United States, April 14, 2004,
p. 20 (`The organization around missions where those capabilities are
fully integrated in whatever structure you want to create I think is
the way ahead in the future, and that's the way we're moving').]

Among their responsibilities, the centers will provide
all-source analysis of intelligence, identify and propose to the NID
intelligence collection and analysis requirements, have primary
responsibility for net assessments and warnings, and ensure appropriate
officials have access to a variety of intelligence assessments. The NID
will supervise the work of the centers. With their ability to harness
the resources of entities with differing capabilities and create a
unified effort to

focus on a particular issue area, the centers will improve the
intelligence community's ability to respond with speed and agility.

Some criticize the national intelligence centers as threatening
to drain offices such as the CIA Counterterrorist Center of analysts
critical for the performance of human intelligence. A strength of the
CIA Counterterrorist Center is indeed its close linkage between
analysts and human intelligence operators. But there are two basic
types of analysts in the intelligence community: analysts who provide
tactical assistance to a collection activity, and analysts who conduct
strategic analysis. The former, for example, concentrate on whether a
communications intercept of a terrorist referencing (hypothetically) a
`wedding' refers to a real wedding or an attack--and must have a very
detailed knowledge of that terrorist's life and activities. These types
of analysts should generally stay within the agencies, such as at the
Counterterrorist Center, to assist collectors. But a number of
strategic analysts--who, for example, fuse together all sources of
information to provide a comprehensive picture of al Qaeda's strategy
and objectives over the next decade--should move to the centers in
order to be at the focal point at which information is consolidated
from all sources.

One option was to have the legislation both mandate that the
NID create centers on NSC-generated topics and explicitly imbue the
centers with specific authorities. This approach is akin to the
Goldwater-Nichols Act, which sought to strengthen the combatant
commanders vis-a.AE2-vis the Military Services by explicitly
delineating their authorities in a long list. The message that Congress
sent to the Military Services was clear: the combatant commanders are
in charge of warfighting. Yet ultimately the Committee concluded that
mandating that the NID create specific centers--rather than authorizing
the NID to create them pursuant to priorities established by the
NSC--might be too restrictive. Some topics might not require
full-fledged, permanent centers but rather more ad hoc arrangements.
Thus the legislation does not require the NID to create specific
centers but authorizes the NID to do so. Given the critical role these
centers will play in reorganizing how the intelligence community
addresses critical issues, it is the Committee's expectation that the
NID will create centers as needed expeditiously.

Each center will be led by a director, who will be appointed by
the NID and will also serve as the NID's principal adviser in that
center's area of responsibility. The center's director reports to the
NID. Each center will be provided a professional staff from personnel
transferred, assigned, or detailed from elements of the intelligence
community as directed by the NID.

The NID will designate an agency to provide administrative
support to each center. However, this provision does not imply that
such agency will have authority over the center. The situation that
afflicts the Counterterrorist Center, in which a center with
intelligence community-wide responsibilities became subsumed within the
CIA, will be unacceptable for a national intelligence center. The
national intelligence center is under the authority of the NID, not of
any agency.

The National Counterintelligence Executive will also be moved
to the NIA in order to integrate it into the new structure. This entity
is similar to a national intelligence center.

IX. CREATING THE NATIONAL COUNTERTERRORISM CENTER TO FUSE INTELLIGENCE AND COORDINATING INTERAGENCY STRATEGY AGAINST TERRORISM

The bill creates a National Counterterrorism Center (NCTC) within
the National Intelligence Authority, per the Commission's
recommendation. The NCTC will develop and unify strategy for civilian
and military counterterrorism efforts; effectively integrate
counterterrorism intelligence activities of the U.S. Government, both
inside and outside of the United States; and develop interagency
counterterrorism plans, i.e. plans that involve more than one
department, or element of the executive branch (unless otherwise
directed by the President), and include the mission, objectives to be
achieved, courses of action, coordination of agency operational
activities, recommendations for operational plans, and assignment of
departmental or agency responsibilities.

The Commission's recommendation for an NCTC arises from two
main findings. First, intelligence agencies are not integrated in their
efforts against terrorism. Thus the NCTC will have a Directorate of
Intelligence--in essence, a National Intelligence Center which shall
have primary responsibility for the analysis of terrorism and terrorist
organizations from all sources of intelligence, whether collected
inside or outside the United States. Second, the Commission found that
counterterrorism requires an Executive Branch-wide effort to mount
joint operations to counter terrorism. Thus, the NCTC will have a
Directorate of Planning to develop plans, assign responsibilities,
monitor implementation, and provide reports to the NID and the
President.

A. Interagency Counterterrorism Planning

The NCTC's Directorate of Planning will concentrate on planning
activities that are `joint,' meaning that they involve more than one
agency. Such planning will be at both the strategic level, such as
`winning hearts and minds' in the Muslim world, and at a more specific
level, such as hunting for Bin Ladin. For example, the NCTC will craft
plans for dealing with an al Qaeda cell--whether to destroy it with
military force or infiltrate it to acquire leads on Bin Ladin. The NCTC
will assign agencies responsibilities as outlined in its plans. NCTC's
plans will be developed utilizing input from personnel of other
departments and agencies who have expertise in their agencies'
priorities, functions, assets, and capabilities with respect to
counterterrorism.

An analogy for understanding the NCTC's `interagency
counterterrorism planning' is lanes in a highway, with each lane
symbolizing an agency's expertise (e.g., diplomacy, special operations,
espionage, and law enforcement). The NCTC will not tell each agency how
to drive in its lane. But effective counterterrorism requires choosing
which lane to use in a particular situation--meaning which type of
activity, and thus which agency, should have the lead in a

particular situation. The NCTC will select the lane and propose
a travel plan but will have no authority to order an agency actually to
drive. If an agency head objected to the NCTC's plan and assignment of
responsibility, then the issue could be elevated to the President.

The Committee recognizes that the term `operational planning'
has a specific meaning in the DoD context. `Operational planning' for
DoD refers to an arduous process to delineating the details of
operations--for example, the time sequence of deployments of military
assets, and where the hinges are on a door for purposes of a special
operations raid. The NCTC can make specific recommendations for
operational plans. But the legislation makes clear that the NCTC's
assignments are not binding on agencies. In other words, the NCTC lacks
authority to direct operations by agencies in the Executive Branch and
will not be in the military chain of command. Agency heads could object
to the NCTC's plans, at which point the NID could either accede or
raise the issue to the President. The NCTC will not resolve policy
issues but instead will elevate policy disputes to the President for
resolution.

B. The NCTC Director

The NCTC Director will be Senate-confirmed and the equivalent of
a Deputy Secretary. The NCTC Director reports to the NID regarding the
activities of the Directorate of Intelligence and to the President and
the NID regarding the activities of the Directorate of Planning. The
Commission's report recommended this arrangement, although subsequent
statements indicated that the Commission favored the NCTC director
reporting directly to the President regarding counterterrorism
operations. The justification for this latter arrangement apparently
was that the NID is an intelligence official and therefore should not
be involved in advising the President on counterterrorism activities
across the Executive Branch (which frequently may not involve any
intelligence agencies at all). Ultimately, the Committee determined
that giving the NCTC director two separate reporting chains, one to the
President and the other to the NID, could lead to confusion and
competition between the NID and the NCTC director.

The NCTC Director will play an active role in selecting key
counterterrorism officials in the Executive Branch; the head of the
relevant department or agency must seek the Director's concurrence in
the selection or recommendation to the President for the Director of
the CIA Counterterrorist Center, the Assistant FBI Director in charge
of the Counterterrorism Division, the State Department's
Ambassador-at-Large for Counterterrorism, and any other official
designated by the President. If the Director does not concur in that
selection, then the head of the relevant department or agency must
inform the President of the Director's nonconcurrence.

X. CONCERNS ADDRESSED IN CREATING A NATIONAL INTELLIGENCE DIRECTOR

In crafting this legislation, the Committee addressed a number of
concerns it heard relating to the creation of a National Intelligence
Director.

A. Intelligence Support to the Warfighter

Some have expressed the fear that creating a NID with more power
and control over the national intelligence elements of the Defense
Department (i.e., NSA, NGA, and NRO) could harm the provision of
intelligence to the military. The Committee carefully considered this
concern, with full recognition that intelligence is more vital to, and
more closely integrated into, military operations than ever before.
Ensuring that the military receives the intelligence that it needs will
be one of the core responsibilities of the NID. As stated by Acting DCI
John McLaughlin in his testimony before the committee, `everyone in the
intelligence community understands that NSA and NGA, in particular,
both integral parts of the national intelligence community, have a
vital role to play in supporting combat, as does the CIA. And that role
would have to be preserved, regardless of who they report to or how
this community is ultimately structured.'

The committee believes that the NID can and will enhance, not
detract from, the quality of intelligence provided to the military. For
example, by providing for a common information technology and ensuring
that information is rapidly disseminated to those who need it, the NID
will provide a tremendous benefit to the warfighter.

Nonetheless, the committee did not go as far as some have
proposed and place NSA, NGA and NRO under the exclusive control of the
NID. These agencies, as well as DIA, are national intelligence and
combat support agencies, and the Committee did not want to take any
action that might weaken the bonds that tie them to the military forces
they support in that capacity. The Committee was also concerned that
removing these agencies entirely from the control of the Secretary of
Defense could lead the Defense Department to recreate the intelligence
capabilities of these agencies within programs controlled by the
Department, thus leading to unnecessary waste and duplication.

Like the Commission, the Committee concluded that it is not
necessary to take such a dramatic step in order to achieve the goal of
a more unified national intelligence effort. The Committee believes
that a NID empowered to transform intelligence agencies into a network
will improve the quality of intelligence for both the policymaker and
the warfighter.

B. A Strong NID

In the course of holding eight hearings regarding the
restructuring of the intelligence community, the Committee was urged
not to create an NID that lacked true power, and that served only as an
additional layer of bureaucracy. The Committee has heeded this warning,
and has created an NID that has the power to reform the intelligence
community, improve the quality of analysis, and help ensure joint
action. In short, the NID will be the strong head the intelligence
community has lacked.

Consistent with the 9/11 Commission's recommendations, the
Committee declined to create a new bureaucratic layer by moving
intelligence collection agencies into a massive new

Department of Intelligence. The CIA Director will report to the
NID, as will the NCTC Director and other NIC Directors. However, the
heads of other elements in the intelligence community will stay within
their existing chains of command. The desire to preserve clear lines of
command also caused the Committee to decline to pursue the 9/11
Commission's recommendation to create three Deputy NID positions,
filled by the CIA Director, the Under Secretary of Defense for
Intelligence, and the Executive Assistant Director for Intelligence of
the FBI. The Committee heard testimony from a number of witnesses that
this `dual-hatting' structure would be unworkable, and would create
unclear lines of command.

C. Reorganizing in Time of War

Finally, critics of reform argue that reorganization should not
take place in time of war because it would be too disruptive. This
criticism ignores the history of American warfighting, in which
significant changes have been made in order to ensure victory. The
Pentagon was constructed in World War II, new technology was developed,
and new organizational units and tactics were developed to counter the
enemy. Moreover, this criticism either assumes that the intelligence
community is already structured appropriately to win the war on
terrorism--an assumption soundly rejected by the Commission--or
prioritizes the current structure over the requirements of U.S.
national security.

XI. CREATING A FORUM FOR DEPARTMENT-LEVEL DISPUTE RESOLUTION

The bill establishes a Joint Intelligence Community Council to
resolve conflicts at the cabinet level. The Joint Intelligence
Community Council will consist of the National Intelligence Director
(who will chair the Council), the Secretary of State, the Secretary of
the Treasury, the Secretary of Defense, the Attorney General, the
Secretary of Energy, the Secretary of Homeland Security, and any other
officers as the President may designate. The Joint Intelligence
Community Council shall meet upon the request of the National
Intelligence Director.

The Joint Intelligence Community Council will provide a
critical forum for resolving disputes between entities in the
intelligence community if differences cannot be resolved at the staff
level. The Joint Intelligence Community Council ensures that there is
an established process through which the Principals can discuss and
resolve these differences on intelligence issues. Such a forum is
important, because disputes that seem irreconcilable on the staff level
are often easily resolved in face-to-face meetings between Principals.

The JICC will also serve as an important advisory body to the
National Intelligence Director, helping to guide decision-making and
issue mid-course corrections. The Joint Intelligence Community Council
will assist the National Intelligence Director in developing and
implementing a joint, unified national intelligence effort to protect
national security by advising the National Intelligence Director on
establishing requirements, developing budgets, financial management,
and monitoring and evaluating the intelligence community's performance,
and in ensuring the timely execution of programs, policies, and
directives established or developed by the National Intelligence
Director.

XII. STRENGTHENING THE OBJECTIVITY AND QUALITY OF INTELLIGENCE

Intelligence is rarely a silver bullet, pointing inexorably to a
single, wise course of action. But the quality of intelligence is
critical for ensuring that policymakers--both in the Executive Branch
and Congress--are in the best position possible to make national
security decisions. And the quality of intelligence does not derive
solely from the ability to purloin secrets. The enemy's secrets are
most useful when they are analyzed--put into context of the known and
unknown, used to illuminate the enemy's actions, capabilities, and
intentions, and reflected upon from a strategic perspective.

The Committee is troubled by instances in which the quality of
intelligence analysis has been substandard, either due to
politicization of intelligence analysis or poor analytic tradecraft.
Two prominent examples of politicized intelligence are the intelligence
given to Congress in support of the Tonkin Gulf Resolution of 1964, and
intelligence apparently shaded by DCI Bill Casey during the Iran-Contra
Affair. 17

[Footnote] And, as the Senate Select Committee on
Intelligence's recent report makes clear, intelligence analysis prior
to the current Iraq War was deeply flawed.

[Footnote 17: George Schultz, Turmoil and Triumph: My Years as Secretary of State (Charles Scribner's Sons, 1993), p. 691.]

Accordingly, the Committee's legislation places strong emphasis
on ensuring that intelligence is both objective and unbiased. The
legislation also ensures that Congress has access to the intelligence
it needs to support its decisionmaking.

A. Ensuring That Intelligence Is Objective, Independent, and Based on Alternative Views

The legislation requires that the NID provide the President and
Congress with national intelligence that is timely, objective,
independent of political considerations, and which has not been shaped
to serve policy goals. Indeed, the bill makes it clear that the NID is
responsible for improving the quality of our intelligence analysis.
First, the NID is to promote and evaluate the utility of national
intelligence to consumers in the U.S. government. Second, the NID is
also to ensure that policymakers have access to a variety of
intelligence assessments and analytical views. The Committee has heard
repeated testimony about the importance of ensuring a diversity of
analytical views and believes that the bill makes this responsibility
clear.

The Director of the NCTC and directors of other national
intelligence centers are required to provide the President, Congress,
and the NID with intelligence that is timely, objective, independent of
political considerations, and which has not been shaped to serve policy
goals. The CIA director has a similar obligation for any intelligence
produced by CIA.

The National Intelligence Council is required to ensure that
its intelligence estimates are timely, objective, independent of
political considerations, and have not been shaped to serve policy
goals. The Council's products must include alternative views held by
elements of the intelligence community. Indeed, the NID shall ensure
that the Council's products (1) distinguish within the analysis between
intelligence, assumptions, and judgments; (2) describe the quality and
reliability of the intelligence; (3) present and explain alternative
conclusions, if any; and (4) characterize any uncertainties.

B. Ensuring Congressional Access to Intelligence

The legislation includes several provisions to enhance Congress' access to intelligence.

No officer or agency of the Executive Branch can require the
NCTC Director to receive permission to testify before Congress. In
addition, no officer or agency of the Executive Branch can require the
NCTC Director to submit testimony, recommendations, or comments to
Congress for review prior to submission to Congress if the material
includes a statement indicating they are the NCTC's views and do not
necessarily represent the Administration's views.

The legislation requires that the Congress receive a range of
analytic products to inform Congress on national security issues. The
NID, the NCTC Director, and the director of any national intelligence
center must provide to the Congressional intelligence committees and
any other committee with jurisdiction over the subject matter to which
the information relates all intelligence assessments, intelligence
estimates, sense of the intelligence community memoranda, and daily
senior executive intelligence briefs. Excluded from this list are the
Presidential Daily Brief and those reports prepared exclusively for the
President.

The legislation also provides a mechanism by which Congress can
receive other intelligence information, such as collection data that
underlies the analytic reports Congress would routinely receive. The
NID, NCTC Director, and directors of other national intelligence
centers shall respond within 15 days to requests for any intelligence
information from the Congressional intelligence committees or other
committees of Congress with jurisdiction over the subject matter to
which the information relates. The NID, NCTC Director, and directors of
other national intelligence centers are also required to respond to
such requests from the Chairman, Vice Chairman, or Ranking Member of
the Senate or House intelligence committees. The NID, NCTC Director,
and directors of other national intelligence centers are required to
provide the requested information unless the President certifies that
the information is not being provided due to a Presidential privilege
pursuant to the United States Constitution.

Finally, employees or contractors of the NIA, CIA, DIA, NGA,
NSA, FBI, and other agencies principally involved in the conduct of
foreign intelligence or counterintelligence are permitted to disclose
certain information to Congress without reporting it first to the
appropriate inspector general. The information they may report is
information, including classified information, that they reasonably
believe provides direct and specific evidence of a false or inaccurate
statement to Congress contained in an intelligence report to Congress
or that intelligence information has been withheld from Congress.

C. Establishment of the Ombudsman of the National Intelligence Authority

The bill establishes an Ombudsman of the National Intelligence
Authority. The NIA Ombudsman is modeled after the Ombudsman currently
established at the Central Intelligence Agency. It is intended that the
Ombudsman will serve as an independent and informal counselor for those
who have complaints about real or perceived problems of politicization,
biased reporting, or lack of objective analysis. The Ombudsman will
also have the authority to monitor the effectiveness of measures taken
to address these problems. The Ombudsman will also have the authority
to undertake review of analytic product to ensure that analysis is
timely, objective, independent of political considerations, and based
upon all sources available to the intelligence community.

In carrying out these duties, the Ombudsman will be authorized
to receive complaints, and review analytic products produced by the
National Intelligence Authority, any element of the intelligence
community within the National Intelligence Program, and to the extent
they are involved in the analysis of national intelligence, other
agencies within the intelligence community.

The bill establishes within the Ombudsman's office an Analytic
Review Unit. This Unit is intended, subject to the supervision of the
Ombudsman, to conduct detailed evaluations of analysis by the National
Intelligence Authority, any element of the intelligence community
within the National Intelligence Program, and to the extent they are
involved in the analysis of national intelligence, other agencies
within the intelligence community. The Ombudsman is to provide the
Analytic Review Unit with a staff who possess the appropriate expertise
to carry out this work.

The bill also provides that the Ombudsman may refer to the
Office of the Inspector General for further investigation serious cases
of misconduct relating to the politicization of intelligence, biased
reporting, or lack of objective analysis.

XIII. ENSURING INFORMATION-SHARING

The legislation will require that the President establish an
information sharing network, to break down the stovepipes that
currently impede the flow of information. The network, modeled on a
proposal by a task force of the Markle Foundation that was endorsed by
the 9/11 Commission, is to consist of policies and information
technology designed to facilitate and promote the sharing of
intelligence and homeland security information throughout the federal
government, with state and local agencies and, where appropriate, with
the private sector, while simultaneously ensuring privacy and civil
liberties concerns are adequately addressed.

The bill will give the President responsibility for issuing
overall guidelines governing the collection, sharing and use of
intelligence and homeland security information as well as guidelines to
protect privacy and civil liberties. The Director of OMB will be given
primary responsibility for implementing the new information sharing
network, and this official is required to appoint a principal officer
(who shall have the rank of a Deputy Director) to handle the day-to-day
responsibilities. The OMB Director will be required to submit to
Congress a detailed enterprise architecture and implementation plan
within nine months and will have to regularly report to Congress on the
network's progress. Individual agencies involved in the information
sharing network will also have to submit plans for implementing the
network.

The bill will give the President responsibility for issuing
overall guidelines governing the collection, sharing and use of
intelligence and homeland security information as well as guidelines to
protect privacy and civil liberties. The Director of OMB will be given
primary responsibility for implementing the new information sharing
network, and the NID is required to appoint a principal officer (who
shall have the rank of a Deputy Director) to handle the day-to-day
responsibilities. The OMB Director will be required to submit to
Congress a detailed enterprise architecture and implementation plan
within nine months, and individual agencies involved in the information
sharing network will also have to submit plans for implementing the
network; both will have to regularly report to Congress on their
progress.

In addition, this section of the bill establishes an Executive
Council on Information Sharing, made up of key federal officials, as
well as state and local and private-sector representatives, to work
with the OMB Director to implement the network and coordinate efforts,
and an Advisory Board on Information Sharing, made up of outside
experts, to provide advice and expertise to the President and Executive
Council.

XIII. PROTECTING CIVIL LIBERTIES AND PRIVACY

The National Commission on Terrorist Attacks Upon the United States
concluded in its recommendations that `[w]e must find ways of
reconciling security with liberty, since the success of one helps
protect the other * * * [t]he choice between security and liberty is a
false choice, as nothing is more likely to endanger America's liberties
than the success of a terrorist attack at home.' 18

[Footnote] The Commission also noted that `[t]his shift of
power and authority to the government calls for an enhanced system of
checks and balances to protect the precious liberties that are vital to
our way of life.' 19

[Footnote] In light of this, the Commission recommended that
in this time of increased and consolidated government authority, there
should be a board within the executive branch to oversee adherence to
the guidelines the Commission recommends and the commitment of the
government to protect civil liberties.

[Footnote 18: Commission report, p. 395.]

[Footnote 19: Commission report, p. 394.]

Testimony received by the Committee during its hearings on the
Commission report highlighted the importance and need to implement this
recommend. In his testimony before the Committee on July 30, 2004, Lee
Hamilton, Vice Chair of the Commission, stated, `[w]e believe that
[regarding] the civil liberties, you need an oversight board in the
Executive Branch as a kind of an added check on executive authority,
and that's a very important board.'

In light of the Commission recommendations and concerns about
ensuring privacy and civil liberties concerns are appropriately
considered, Title II, Subtitle B of the proposed legislation creates a
Privacy and Civil Liberties Oversight Board (`Board').

The Board is to have a Chairman and four additional members,
who are to be appointed by the President with the advice and consent of
the Senate. Members of the Board are to serve fixed, six-year terms,
and no more than three of the five Board members may be of one
political party.

The bill gives the Board two functions. First, the Board is to
advise the President and other federal officials at the front-end, when
they are proposing, making or implementing policies related to efforts
to protect the Nation against terrorism, to ensure that the protection
of privacy and civil liberties are appropriately considered. Although
policy makers are required to get the Board's views on proposed
policies and actions, the Board does not have any veto authority over
any proposal.

Second, the Board is to investigate and review government
actions at the back end--that is, to review the implementation of
particular government policies to see whether the government is acting
with appropriate respect for privacy and civil liberties and adhering
to applicable laws, regulations and policies. In conducting
investigations, the bill gives the Board the authority to obtain
documents and access to personnel from government agencies and the
ability to subpoena documents and testimony from those outside the
government.

The bill also requires that the heads of certain federal
agencies involved in the efforts to protect the Nation from terrorism
designate at least one senior agency official to serve as privacy and
civil liberties officers for the agencies. These officers' functions
mirror those of the Board on an agency-specific level: they are to (1)
advise the agency in appropriately considering privacy and civil
liberties concerns in the development and implementation of policies
related to efforts to protect the nation against terrorism; (2)
investigate and review agency actions and policy implementation to
ensure that the agency is adequately considering privacy and civil
liberties in its actions; and (3) ensure that the agency has a process
for receiving and responding to complaints from individuals.

XIV. PROMOTING AN INTELLIGENCE WORKFORCE FOR THE 21ST CENTURY

A central theme of the 9/11 Commission's report was the need to
better combine the resources of government effectively to achieve unity
of effort, 20

[Footnote] and the Commission offered several recommendations
to better marshal the personnel resources of the government and of the
nation for this effort. The creation of a common set of personnel
standards within the intelligence community should help create a group
of intelligence professionals better able to collaborate on joint
projects, and, to accomplish this, the Commission recommended that the
NID should--

[Footnote 20: Commission report, p. 399.]

set personnel policies to establish standards for education and
training and facilitate assignments at the national intelligence
centers and across agency lines. 21

[Footnote]

[Footnote 21: Commission report, p. 414; see also p. 409.]

Moreover, to help transform the culture of the intelligence
community from a service-specific mind-set to joint, and support more
integrated operations--including, especially, the unified joint
commands constituting the proposed NCTC and other national intelligence
centers--the Commission endorsed the kind of approach applied by the
Goldwater-Nichols Act. That Act established a joint program of joint
personnel management for military officers (such as requiring military
officers to serve tours outside of their service in order to win
promotion) in order to foster a more integrated structure and to
improve the quality of joint operations. 22

[Footnote]

[Footnote 22: Commission report, pp. 403, 408-409.]

Testimony at Committee hearings supported and expanded upon
these points. For example, Max Stier, President and CEO of the
Partnership for Public Service, reinforced the importance of fostering
an organizational culture supportive of joint action, including through
`programs to improve intelligence training and collaboration across
agencies and among all levels of government':

Such provisions recognize that we need not just an
organizational change, but a cultural change within the intelligence
community if the reforms being considered by the Committee are to
succeed. People training together, and training for joint missions with
other federal agencies and with other levels of government, will go a
long way toward shifting the intelligence workforce toward the `need to
share' mindset that is so critical. 23

[Footnote]

[Footnote 23: The 9/11 Commission Human Capital
Recommendations: A Critical Element of Reform, hearing before the
Senate Governmental Affairs Committee Subcommittee on the Oversight of
Government Management, the Federal Workforce, and the District of
Columbia, 108th Congress (September 14, 2004) (testimony of Max Stier,
Partnership for Public Service).]

A. The NID's Community-Wide Workforce Responsibilities

The Committee's bill assigns the NID the primary responsibility
for establishing new workforce policies for the intelligence community
that would achieve the improvements in integration called for by the
Commission. The NID's key responsibilities in this area are set forth
in section 112(a)(8) of the bill, which requires the NID to develop and
implement, in consultation with the rest of the community and the
affected departments, personnel policies and programs to accomplish a
number of objectives, to enhance the capacity for joint operation, as
well as the general quality and effective management of the workforce.

For example, the NID is responsible for establishing policies
and programs that encourage and facilitate the rotation of personnel to
the NCTC and to other national intelligence centers, as well as between
elements of the community, and that set standards for education,
training, and career development. The community-wide policies and
programs will encourage and facilitate the recruitment and retention of
individuals who are highly qualified, and will provide for the
recruitment and training to achieve a workforce that is sufficiently
diverse for the most effective collection and analysis of intelligence.
The NID is to make an individual's service in more than element of the
intelligence community a condition of promotion to certain positions,
and must include the specific personnel-management enhancements set
forth in section 114 to facilitate and support joint and integrated
operations. The policies and programs must also generally provide for
effective human capital management within the intelligence community,
and must be consistent with the public employment principles of merit
and fitness.

In the establishment of any personnel policies, programs, and
standards for the intelligence community, the Committee believes that
the NID should ensure an open and transparent process that includes
consultation with affected agencies and personnel at all levels. The
NID should provide for comprehensive communications strategies that
reach out to affected agencies and personnel both to gain the benefit
of their suggestions and experience and to make the process and the
resulting policies and standards as fair and transparent as possible.
The Committee also notes the need to provide the necessary training for
managers to implement new human capital policies and practices and
urges the NID to be sure such training is provided before such policies
and practices are implemented.

B. Facilitating Joint and Integrated Intelligence Operations

The Committee agrees with the Commission's finding that the
Goldwater-Nichols Act of 1986 provides a useful model for achieving
more integrated operations within the intelligence community.
Accordingly, section 114 of the bill sets forth several specific steps
that the NID will undertake to facilitate staffing of joint and
community-management functions. The NID will establish incentives for
service at the national intelligence centers, the NCTC, and in other
community management positions. Moreover, personnel assigned or
detailed to service under the NID must be promoted at rates equal to or
greater than other personnel. The NID will also establish
personnel-management mechanisms to facilitate and encourage the
rotation of personnel through various elements of the intelligence
community in the course of their careers.

C. The Chief Human Capital Officer of the National Intelligence Authority

To assist the NID in fulfilling the highly critical and complex
personnel management functions assigned by the legislation, section 129
of the bill requires the NID to appoint a Chief Human Capital Officer
(CHCO). This provision builds on legislation agreed to by this
Committee and enacted in 2002 as part of the Homeland Security Act,
Public Law 107-296, 24

[Footnote] requiring the appointment of CHCOs at departments and many agencies throughout the government. 25

[Footnote] The CHCO of the National Intelligence Agency
established in this legislation would advise and assist the NID in
exercising his authorities and responsibilities with respect to the
intelligence community workforce as a whole, and would also help in
carrying out the entire human capital management program at the NIA
itself.

The Chief Human Capital Officer will look strategically at the
workforce challenges facing the intelligence community and assist the
NID with the development of common personnel policies and standards
critical to the fundamental reform of the intelligence community. The
CHCO will also assist the NID with the selection, training, and
development of a highly-qualified workforce to meet the NIA's strategic
needs. The Committee is aware that many agencies within the
intelligence community, such as the CIA, now have appointed Chief Human
Capital Officers. The Committee strongly encourages the CHCO to meet
periodically with these individuals and other human resource
professionals within the intelligence community to ensure the alignment
of human capital policies with the intelligence community's current and
future mission needs.

D. Security Clearances

In recent years, both the number of individuals requiring
clearances and the number of individuals requiring access to higher
levels of classified information has increased. The complexity of the
current process for providing and maintaining security clearances is a
barrier to the efficient movement of both employee and contract
personnel who require access to information to perform their assigned
tasks. The government must provide high-quality investigations and
timely adjudication of security clearances to help meet our
intelligence needs.

The Commission recommended that a single agency be made
responsible for providing and maintaining security clearances, insuring
uniform standards--including uniform security questionnaires and
financial report requirements, and maintaining a single database. In
addition, the Commission suggested that the agency could also be
responsible for administering polygraph tests on behalf of
organizations that require them. 26

[Footnote] The Commission made these proposals in the context
of helping accelerate the process for national security appointments
during a change in administrations; the Committee believes reforms of
the process for granting security clearances is also important to
improve personnel management throughout the intelligence community.

[Footnote 26: Commission report, p. 422.]

Section 115 of the legislation includes a number of provisions
to address the long-standing problems surrounding the security
clearance process. The legislation would require the President to
designate a single federal agency within 45 days of the date of
enactment to be responsible for providing and maintaining clearances,
and would require the transfer of personnel

solely responsible for security clearance investigations to
help ensure the agency is fully functional within one year of the date
of enactment. 27

[Footnote] The Committee expects the agency selected to make
use of all available resources to help eliminate the current backlog.
The Committee intends the agency to enter into Memoranda of
Understanding with agencies carrying out responsibilities relating to
security clearances or security clearance investigations before the
date of enactment of this Act. At present, there are eighteen
non-defense agencies performing security clearance investigations. 28

[Footnote] Client agencies may continue to perform their own
adjudications and may continue to conduct their own polygraph
examinations.

[Footnote 27: The Committee recognizes recent
legislation authorizing the transfer of over 1,800 security clearance
investigative employees. P.L. 108-396, Section 906, 117 Stat. 1392,
1561-1563 (2004). As of the date of this report, the transfer had not
taken place.]

[Footnote 28: Briefing by Office of Personnel Management, September 2002.]

The legislation would also require the President, acting through
the NID and in consultation with the agency selected to provide and
maintain clearances, to establish uniform standards and procedures for
the access to classified information. The standards would apply to both
employee and contract personnel. The investigative standards should
provide meaningful information to individuals making the decision
whether or not to grant a clearance. For example, GAO recently reported
that less than one-half of one percent of the potential security issues
identified during an investigation are derived from neighborhood
checks; however, this information source accounts for about 15 percent
of the investigative time. 29

[Footnote]

[Footnote 29: GAO-04-632, p. 34.]

This section would also require reciprocity for clearances at
the same level among departments, agencies, and elements of the
executive branch. The Committee believes reciprocity will help
facilitate assignments at the national intelligence centers and across
agency lines within the intelligence community.

The agency selected would also be tasked with establishing and
maintaining a database of all clearances to help ensure reciprocity.
The establishment and use of a database, which should be available to
client agencies, will allow clearance status to be centrally verified,
and prevent needless loss of time and resources while security officers
verify the clearance of individuals outside of the immediate
department, whether the individual is transferred to a joint assignment
or simply needs to attend a meeting or have access to a document.

Finally, in keeping with this broader effort on security
clearances, the legislation provides that the NID will have
responsibility with respect to access to Sensitive Compartmentalized
Information, because section 112(b) of the bill specifically provides
that the President shall act through the NID in setting standards for
the grant of access.

E. National Intelligence Reserve Corps

For the intelligence system to have the agility that the current
times require, it must have the tools to maintain the services of
individuals with unique or specialized skills and qualifications. To
assist the NID in responding this challenge, section 116 of the
legislation provides the NID discretionary authority to establish and
train a National Intelligence Reserve Corps. The corps would allow for
temporary reemployment of former employees of the elements of the
intelligence community to meet emergency mission requirements. As a
recruitment incentive, former employees who volunteer and are selected
for the corps would not be subject to a reduction in annuity from the
Civil Service Retirement and Disability Fund. The dual compensation
waiver is consistent with the authority recently granted to the
Department of Defense to hire individuals for hard-to-fill positions
where the annuitant has unique or specialized skills and
qualifications. 30

[Footnote] The Committee believes this critical hiring
flexibility will help address the challenges facing the intelligence
community, while also ensuring retirements do not leave the NID at a
critical disadvantage.

[Footnote 30: 5 U.S.C. Sect. 9902.]

F. Intelligence Community Scholarship Program

The intelligence community needs every tool available to help
recruit and train individuals with the skills critical to the
community's mission and goals. Shortly after the September 11 attacks,
Robert Mueller, Director of the Federal Bureau of Investigation, made a
public plea for speakers of Arabic and Farsi to translate documents
that were in U.S. possession but which were left untranslated due to a
shortage of employees with proficiency in those languages. 31

[Footnote] The Commission Report recommended that the CIA
Director should emphasize (1) rebuilding the CIA's analytic
capabilities; and (2) developing a stronger language program, with high
standards and sufficient financial incentives. 32

[Footnote] These reports demonstrate that action is needed to
help intelligence community agencies more effectively recruit
highly-skilled individuals for positions within the intelligence
community.

To help meet this challenge, section 152 of the legislation
would require the NID to establish an Intelligence Community
Scholarship Program, to provide college scholarships to students in
exchange for service within the intelligence community. The legislation
would require the scholarships to be awarded on a competitive process
primarily on the basis of academic merit and the needs of intelligence
community agencies. In addition to the criteria established in the
legislation, the Committee encourages the NID and intelligence
community agencies to give special consideration to applicants seeking
degrees in foreign language, science, and mathematics, or a combination
of those subjects. The legislation would require 10 percent of the
scholarships under the Program to set aside for individuals who are
employees of intelligence community agencies on the date of enactment
of this Act, providing the NID with a tool to enhance the skills of the
existing intelligence community workforce.

G. Framework for Cross-Disciplinary Education and Training

Each agency of the intelligence community has training elements
and activities that seek to give employees trade craft and functional
skills to better perform their jobs. However, there is no cross-agency
entity whose goal it is to bring together personnel from all the
intelligence agencies to promote understanding of each other's mission
and cultures and facilitate cooperation and collaboration. Some
elements of the federal government have educational institutions to
promote joint thinking and collaboration. For example, the defense
community has a robust, successful model in its National Defense
University, whose mission it is to: `educate military and civilian
leaders through teaching, research, and outreach in national security
strategy, and national resource strategy; joint multinational
operations; information strategies, operations, and resource
management; acquisition; and regional defense and security studies.' 33

[Footnote]

[Footnote 33: http://www.ndu.edu/info.mission.cfm.]

In testimony before the House Permanent Select Committee on
Intelligence, the CIA testified that it was examining the concept of a
national intelligence university, similar to the various service war
colleges and staff schools, stating it could be as much a virtual
university as an actual campus, as a way to better train analysts
across the community. 34

[Footnote] The Committee believes the intelligence community
would benefit from a framework for cross-disciplinary education and
training to help prepare selected individuals for joint rotations and
assignments within the intelligence community. To accomplish this,
section 151 of the legislation requires the National Intelligence
Director to establish an integrated framework that brings together the
educational components of the intelligence community to promote joint
education and training.

[Footnote 34: Counterterrorism Analysis and
Collection: The Requirement for Imagination and Creativity, hearing
before House Permanent Select Committee on Intelligence, 108th Congress
(August 4, 2004) (testimony of Assistant Director of Central
Intelligence for Analysis and Production Mark Lowenthal).]

XV. INTERNAL REFORM AT THE FBI AND CIA

The 9/11 Commission recognized that structural reform at the
top-level of the Intelligence Community was merely a precursor to, and
not a guarantee of, improved performance by each intelligence agency.
The Commission recommended internal reform of the FBI to ensure that
its transformation toward intelligence-collection and analysis is deep
and permanent. While obviously limited by the unclassified nature of
its report, the Commission also recommended that the CIA transform its
human intelligence capabilities in order to counter 21st Century
threats. The Committee sought to use its statutory power to ensure as
much as possible that such internal reforms occur.

A. Ensuring the Permanence of FBI Reforms

The 9/11 Commission stated in its final report that, under
Director Robert Mueller, the FBI has made significant progress in
improving its intelligence capabilities. The Commission also urged the
FBI to fully institutionalize its shift to a preventative
counterterrorism posture. In accordance with the Commission's
recommendations, this section of the bill requires the FBI to improve
its intelligence capabilities by developing and maintaining a national
intelligence workforce consisting of agents, analysts, linguists and
surveillance specialists who are recruited, trained, and rewarded in a
manner consistent with the intelligence mission of the Bureau. The FBI
Director shall carry out a program to enhance the capacity of the FBI
to recruit and retain individuals with skills relevant to the
intelligence mission of the Bureau. Also, the Bureau must afford its
analysts career opportunities commensurate with those afforded analysts
in other intelligence community entities. These requirements are
necessary to ensure that the FBI creates and sustains a workforce with
substantial expertise in, and commitment to, the intelligence mission
of the FBI.

The FBI's operational intelligence capabilities will be
improved because supervisors will be required to become a certified
intelligence officer. In order to ascend to higher level intelligence
assignments in the FBI, personnel must receive advanced intelligence
training, and have held an assignment with another element of the
intelligence community. Field Intelligence Group (FIG) supervisors must
report directly to a senior manager responsible for intelligence
matters, and are responsible for fully integrating analysts, agents,
linguists, and surveillance personnel in the field. (The FBI has
established FIGs in all 56 of its field offices. The FIG is the
centralized intelligence component in each field office, responsible
for intelligence functions. FIG personnel analyze and disseminate the
intelligence collected in their field office). These provisions are
necessary to ensure that the FBI provides effective leadership and
infrastructure to support its field intelligence components.

The Bureau is also directed to expand its secure facilities to
ensure the successful discharge by the field intelligence components of
the national security and criminal intelligence missions of the FBI.

The FBI is directed to modify its budget structure, in
consultation with the Director of the Office of Management and Budget,
according to the four principle missions of the Bureau: (1)
Intelligence; (2) Counterterrorism; (3) Criminal Enterprises/Federal
Crimes; (4) Criminal justice services. This modification streamlines
the FBI's budget structure, and segregates funds according to
priorities, which allows for greater transparency for those charged
with oversight.

Reporting requirements to Congressional committees of
jurisdiction relative to the improvement of FBI intelligence
capabilities are established to provide Congress the information it
needs to fulfill its oversight role.

The legislation also allows the FBI to establish an
intelligence career service for FBI analysts. In consultation with the
Director of the Office of Personnel Management, the FBI Director is
given greater flexibility in establishing analyst positions and rates
of pay. Also, the FBI is placed on a more level playing field with
other elements of the intelligence community

with respect to analyst position classification and pay. This
increased pay authority allows the FBI to create pay rates to
appropriately compensate analysts living in high cost of living areas.

By requiring that any FBI performance management system
established for intelligence analysts shall have at least one level of
performance above a retention standard, the Bureau must have at least
three levels of performance for purposes of performance ratings.
Currently, the FBI uses a `pass/fail' rating approach. This provision
is consistent with prior GAO recommendations to the House
Appropriations Committee.

Reporting requirements to Congressional committees of
jurisdiction relative to the FBI's use of its new pay and performance
management system are established to provide Congress the information
it needs to fulfill its oversight role.

B. Reforming the CIA To Develop a 21st Century Human Intelligence Capability

The Central Intelligence Agency will be led by a Director who
will report to the National Intelligence Director in the performance of
those functions which will reside within the CIA, which are to: collect
intelligence through human sources and other appropriate means;
correlate, evaluate and disseminate intelligence; provide overall
direction and coordination of the collection of intelligence through
human sources outside of the United States by other elements of the
government; and perform such other functions as the President may
direct. The bill preserves the existing protections of civil liberties
and prescribes that the CIA shall have no police, subpoena or law
enforcement powers or internal security functions.

The bill creates a new structure for ensuring coordination with
foreign governments. The CIA Director will be responsible for
coordinating relationships between intelligence communities here and
abroad but will execute these responsibilities under the direction of
the NID.

The bill also contains provisions requiring reporting by the
CIA director on efforts to rebuild the CIA. As noted in the
Congressional Joint Inquiry and the Commission report, CIA's human
intelligence capabilities require substantial improvement to meet the
challenges of the 21st Century.

Moreover, the CIA ultimately stands to gain, not lose, under
the current legislation. The Commission noted that the DCI currently
has three roles: head of the Intelligence Community, principal
intelligence adviser to the President, and head of the CIA. The
Commission advocated separating the NID from the CIA director, arguing
that no person can do these three jobs well and that DCIs tend to leave
management of the Intelligence Community to the side. The conduct of
human intelligence against the terrorist threat, and the 5-year
rebuilding of the CIA called for by DCI Tenet in his testimony before
the Commission, requires an official devoted full-time to the task and
not at the expense of other duties. And the CIA can only benefit from
improved information-sharing and integration among intelligence
agencies.

XVI. MONITORING PERFORMANCE

To enhance transparency and Congressional oversight, not later than
one year after the date of the enactment of this Act, the NID shall
submit to Congress a report on the progress made in the implementation
of this Act, including the amendments made by this Act. The report
shall include a comprehensive description of the progress made, and may
include such recommendations for additional legislative or
administrative action as the Director considers appropriate.

To enhance transparency and Congressional oversight, not later
than two years after the enactment of the act, the Comptroller General
of the GAO shall issue an implementation progress report and issue
interim reports as the Comptroller General deems appropriate. These
reports are to provide Congress with (1) an overall assessment of the
progress made in the implementation of this Act (and the amendments
made by this Act), (2) a description of any delays or other short-falls
in the implementation of this Act that have been identified by the GAO,
and (3) recommendations for additional legislative or administrative
action that the Comptroller General considers appropriate. Each
department, agency, and element of the United States Government shall
cooperate with the Comptroller General in the assessment of the
implementation of this Act, and shall provide the Comptroller General
timely and complete access to relevant documents in accordance with
section 716 of title 31, United States Code.

XVII. BRIDGING THE FOREIGN/DOMESTIC DIVIDE IN HIGH-LEVEL POLICYMAKING

The bill merges the Homeland Security Council into the National
Security Council. The combined body, the National Security Council,
will now have, in addition to its traditional responsibilities
overseeing, coordinating, and creating foreign and national security
policies, the responsibility of assessing U.S. objectives, commitments,
and risks in the area of homeland security, including overseeing and
reviewing the homeland security policies of the federal government.

Because terrorist organizations move easily across borders, it
is important that the creation and coordination of policy priorities is
not hindered by the foreign/domestic divide. Currently, domestic
homeland security and intelligence issues are overseen by the Homeland
Security Council, while the National Security Council oversees foreign
and national security policies. The merger of these bodies will enable
the National Security Council to synthesize and amplify its ability to
analyze terrorist threats holistically.

Both the Homeland Security Council and the National Security
Council are chaired by the President. The bodies share many of the same
members. The Homeland Security Council includes the Vice President, the
Secretary of Homeland Security, the Attorney General, the Secretary of
Defense, and such other individuals as the President may designate. The
National Security Council's statutory members are the Vice President,
the Secretary of State, the Secretary of the Treasury, the Secretary of
Defense, and the Assistant to the President for National Security

Affairs. The Chairman of the Joint Chiefs of Staff is the
statutory military advisor to the Council, and the Director of Central
Intelligence is the intelligence advisor to the Council. The new
National Security Council body will remain the same, but will now
include the Attorney General and the Secretary of Homeland Security as
statutory members.

XVIII. OTHER MATTERS

The legislation will take effect 180 days after the date of
enactment. However, the Committee believes that in order to ensure the
rapid implementation of this legislation, the President should begin
acting upon these reforms without delay. Accordingly, the President
would be authorized to determine that the legislation or particular
provisions thereof could take effect on an earlier date. Upon doing so,
the President shall (1) notify Congress of the exercise of such
authority; and (2) publish in the Federal Register notice of the
earlier effective date or dates involved, including each provision (and
amendment) covered by such earlier effective date.

During the implementation phase of this Act, the NID, the CIA
director, and the Secretary of Defense shall jointly take such actions
as are appropriate to preserve the intelligence capabilities of the
United States during the establishment of the NIA. The Committee wants
to emphasize the importance of remaining focused on the country's
national security needs while intelligence reforms occur.

The NIP's top-line aggregate appropriation figure will be
declassified in order to promote public accountability. The Commission
made this recommendation, in addition to recommending that
agency-specific levels be declassified. Although declassification of
the top line would show a trend or particular spikes and dips over a
period of years, there would be no detail as to how funds are being
spent or even why a change occurred--such as due to inflation or rising
salaries. The apparent rationale for the Commission's latter
recommendation is so that the relative allocation of resources between
human and technical collection can be publicly debated. The NID will
submit a report to Congress as to whether declassifying the top-line
appropriations figures for each agency in the Intelligence Community
would harm national security.

For fiscal year 2005, the legislation authorizes to be
appropriated such sums as may be necessary to carry out its provisions.
Speedy appropriation of initial funding will be critical as the NID,
the NIA, the NCTC, and the National Intelligence Centers begin to
operate and as the intelligence agencies pursue internal reform.

III. LEGISLATIVE HISTORY

Beginning in late July 2004, immediately after the issuance of the
9/11 Commission's report, the Committee held a series of eight hearings
examining the Commission's recommendations and the reorganization of
the intelligence community. The content of these hearings is summarized
in the next section.

Following these hearings, the Committee held a business meeting
on September 21 and 22, 2004 to consider the National Intelligence
Reform Act of 2004 as an original bill.

At the business meeting, the Committee considered 26 amendments, and adopted 21, as follows:

Chairman Collins and Ranking Member Lieberman offered a
substitute amendment. Senators Collins and Lieberman also offered a 2nd
degree amendment to make technical changes to the substitute, which was
agreed to by voice vote. The substitute, as amended, was then agreed to
by voice vote.

Senator Coleman offered an amendment to require the National
Intelligence Director to notify the Senate Committee on Governmental
Affairs and the Homeland Security Committee of the House of
Representatives when intelligence personnel are transferred to or from
the Department of Homeland Security. The Committee agreed to the
amendment by voice vote.

Senator Durbin offered two amendments that were considered en
bloc. The first of these amendments modified the Privacy and Civil
Liberties Oversight Board to provide for fixed, six-year terms for
Board members, make the Chairman full-time, required that Board members
have expertise in civil liberties and privacy, and provided that no
more than three members of the Board be members of the same political
party. The second amendment required that Members of the Board are to
appear and testify before Congress and provides that reports of the
Board and of agency privacy and civil liberties officers are to be
submitted to specific Congressional committees. These amendments were
agreed to en bloc by voice vote, and staff was directed to draft
language to ensure that Board members terms were staggered.

Senator Durbin offered an additional amendment to modify the
standards of review used by the Privacy and Civil Liberties Oversight
Board in providing advice on proposals to retain or enhance a
governmental power, including a requirement that the Board consider
whether the executive branch has met its burden of proving that the
power is the least restrictive means of accomplishing the objective.
The Committee did not agree to this amendment, by a vote of 6-10.

Senator Fitzgerald offered an amendment to place the National
Intelligence Authority under the Chief Financial Officers Act of 1990,
so as to subject the National Intelligence

Authority to the same financial management requirements as
other cabinet-level departments and major federal agencies. The
amendment was agreed to by voice vote.

Senator Lautenberg offered an amendment to establish a term of
five years for the National Intelligence Director, with the possibility
of reappointment, which was modified to provide that the National
Intelligence Director could be appointed for `up to' five years.
Senator Specter offered a second-degree amendment to provide that the
National Intelligence Director be appointed for a single 10-year term
and could be terminated only for cause. The second-degree amendment was
not agreed to by a vote of 3-14. Senator Lautenberg's amendment, as
modified, was not agreed to by a vote of 7-10.

Senator Levin offered 13 amendments. The first of these added a
Subtitle C `Independence of Intelligence Agencies' to Title II of the
bill, requiring, among other things, that the National Intelligence
Director be located outside the Executive Office of the President; that
the National Intelligence Director, the Director of the National
Counterterrorism Center, the CIA Director and all national intelligence
center directors provide time, objective and independent advice to the
President and to Congress; that Congress have access to national
intelligence; and that whistleblowers may under certain circumstances
report information directly to Congress. A Senators Collins and
Lieberman offered a second degree amendment that made a number of
changes to the provisions, including exempting certain information
prepared exclusively for the President from required disclosure to
Congress and providing that the Ombudsman of the National Intelligence
Agency may refer serious cases of misconduct relating to the
politicization of intelligence to the NIA Inspector General for
investigation rather giving the initial investigative responsibility to
the Inspector General in the first instance. The second degree
amendment was agreed to by voice vote, and the amendment, as amended,
was then agreed to by voice vote.

Senator Levin's second amendment restricted the NCTC to
strategic planning. Senators Collins and Lieberman offered a second
degree amendment that provided, among other things, that NCTC was
responsible for developing interagency plans. The second degree
amendment was agreed to by voice vote, and the amendment, as amended,
was then agreed to by voice vote.

The third amendment offered by Senator Levin modified the
NCTC's authority to assign responsibilities for counterterrorism
operations to eliminate its authority to assign responsibilities to
specific elements of the Armed Forces. The Committee agreed to this
amendment by voice vote.

Senator Levin's fourth and fifth amendment were considered en
bloc. The fourth amendment provided that the NCTC was to report to the
President and the National Intelligence Director, rather than through
the National Security Council, on certain counterterrorism matters. The
fifth amendment required that the President, rather than the National
Security Council resolve, any disagreements over plans and assignments
by NCTC. The Committee approved these amendments en bloc, by voice
vote.

Senator Levin's sixth amendment provided that programs `to
acquire intelligence for the planning and conduct of military
operations' were not to be part of the National Intelligence Program.
Senators Collins and Lieberman offered a second degree amendment that
excluded programs `to acquire intelligence principally for the planning
and conduct of joint or tactical military operations' by U.S. Armed
Forces. The second degree amendment was agreed to by the Committee by a
vote of 10-6. The amendment, as amended, was then agreed to by voice
vote.

The seventh amendment offered by Senator Levin replaced the
National Intelligence Director's authority to establish and approve the
requirements and priorities governing the collection of national
intelligence with the authority to coordinate the tasking of
intelligence collection. The amendment was not agreed to, by a vote of
6-11.

Senator Levin's eighth amendment was divided into two parts for
consideration by the Committee. The first part required all transfers
of personnel or funds by the National Intelligence Director to be
authorized by law and not exceed applicable ceilings in such
authorizations. The amendment was modified to instead require that all
transfers not exceed applicable ceilings established in law. The
Committee agreed to the Part 1 of the amendment, as modified, by voice
vote. The second part of the amendment limited the bill's authorization
of appropriations to fiscal year 2006 and was modified to limit the
authorization of appropriations to fiscal year 2005. Part 2 of the
amendment, as modified, was agreed to by voice vote.

The ninth amendment Senator Levin offered excluded military
personnel and military personnel funds from the NID's authority to
transfer funds and personnel. The committee did not agree to this
amendment, by a vote of 7-10.

Senator Levin's tenth amendment required the National
Intelligence Director to consult with affected agencies before
reprogramming funds. The amendment was agreed to by voice vote.

Senator Levin's eleventh amendment required that appropriated
funds were to go the National Intelligence Authority and be under the
direct jurisdiction of the National Intelligence Authority. The
amendment was modified to provide that the funds be appropriated to the
National Intelligence Authority but be under the direct jurisdiction of
the National Intelligence Director. The amendment, as modified, was
agreed to by the Committee by voice vote.

Senator Levin's twelfth amendment provided that the National
Intelligence Authority's certifying official may act only to the extent
authorized by law. The Committee agreed to the amendment by voice vote.

The final amendment offered by Senator Levin provided that
where the National Intelligence Director is to recommend to the
President the termination of individual, the NID is to seek the
concurrence of the relevant agency or department head and, if the
agency or

department head does not concur, notify the President of that fact. The amendment was agreed to by voice vote.

Senator Pryor offered an amendment to require the Comptroller
General to submit a comprehensive report to Congress on the
implementation of the legislation no later than two years after the
date of enactment. The Committee agreed to this amendment by voice
vote.

Senator Shelby offered an amendment to establish an Analytic
Review Unit with the NIA's Office of Inspector General to conduct
reviews of analytic products by the NIA or any element of the National
Intelligence Program or any analysis of national intelligence by any
element of the intelligence community, to ensure that the analysis is
timely, objective, independent of political considerations, and based
upon all sources available to the intelligence community. The amendment
was modified to establish the Analytic Review Unit under the NIA
Ombudsman. The amendment, as modified, was agreed to by voice vote.

Senator Specter offered an amendment to provide the National
Intelligence Director with the authority to supervise, direct, and
control elements of the intelligence community performing national
intelligence missions, including the CIA, NSA, National
Geospatial-Intelligence Agency, the National Reconnaissance Office, and
elements of the Defense Intelligence Agency, and to provide that the
head of each such element report directly to the National Intelligence
Director. The Committee did not accept the amendment, by a vote of
5-12.

Senator Voinovich offered three amendments. The first of these
amendments permits the National Intelligence Director with approval of
the President, notification to Congress, and consultation with the
affected department, agency or element, allocate or reallocate
functions among officers of the National Intelligence Program to
establish, consolidate, alter, or discontinue organizational units
within the Program. The amendment was modified to provide that this
authority does not extend to any action inconsistent with law. The
amendment, as modified, was agreed to by voice vote.

Senator Voinovich also offered an amendment to designate a
single federal agency to conduct security clearance investigations and
to maintain a database to help ensure reciprocity among executive
branch agencies for clearances. The amendment was modified to clarify
that agencies that currently adjudicate and grant security may continue
to do so after the underlying investigations are transferred to a
central agency; that agency personnel whose sole function si to perform
clearance investigations will be transferred to the agency designated
to be the central agency for such investigations; and to require that
these security clearance reforms be fully operations within one year.
The Committee agreed to the amendment, as modified, by voice vote.

Senator Voinovich's final amendment established a Federal
Bureau of Investigation Intelligence Career Service. As modified, this
amendment permits the FBI Director, in consultation with the Director
of the Office of Personnel Management, to establish positions for
intelligence analysts, to prescribe standards and procedures for
establishing and classifying such positions, and set pay for such
analysts above existing pay scales. The Committee agreed to this
amendment, as modified, by voice vote.

The Committee ordered that the bill, as amended, be reported by a vote of 14-0.

IV. COMMITTEE HEARINGS

On July 30, 2004, the Committee held a hearing entitled, `Making
America Safer: Examining the Recommendations of the 9/11 Commisson'.
Witnesses included: Thomas Kean, Chairman, National Commission on
Terrorist Attacks Upon the United States; Lee Hamilton, Vice-Chairman,
National Commission on Terrorist Attacks Upon the United States.

The Commissioners explained and answered questions regarding
the 9/11 Commission's central intelligence reform recommendations,
including its proposals to establish a National Intelligence Director,
who would have authority over all Intelligence Community elements,
including authority over personnel, security, and information
technology, and to create a National Counterterrorism Center that would
serve as the government's central knowledge bank on international
terrorism and, with personnel drawn from various agencies across the
government, would conduct joint intelligence and joint operational
planning. The Commissioners did not support creating a domestic
intelligence agency, but they noted that the FBI needs a specialized
and integrated national security workforce.

This hearing focused on the proposal to create a National
Counterterrorism Center. The first panel, consisting of key officials
involved in counterterrorism and homeland security efforts, testified
regarding current interagency efforts and relationships in the war on
terror, how those relationships have changed since 9/11, and how the
creation of a National Counterterrrorism Center would impact their
agencies and functions. The second panel, consisting of the top staff
members of the 9/11 Commission, further explained the Commission's
proposal to create a National Counterterrorism Center.

On August 16, 2004, the Committee held a hearing entitled,
`Reorganizing America's Intelligence Community: A View from the
Inside'. Witnesses included: William Webster, James

Woolsey; and Stansfield Turner. A written statement was
submitted by Robert Gates. Each of the witnesses was a former Director
of Central Intelligence. Mr. Webster also formerly served as the
Director of the Federal Bureau of Investigation.

These witnesses shared the benefits of their experiences as
Directors of Central Intelligence and offered their views on the
creation of a National Intelligence Director, particularly with respect
to the need for the NID to have enhanced authorities with respect to
budget and personnel.

On August 17, 2004, the Committee held a hearing entitled,
`Voicing a Need for Reform: The Families of 9/11'. Witnesses included:
Mary Fetchet, Founding Director, Voices of September 11th, Member,
Family Steering Committee; Steven Push, Co-Founder and Board Member,
Families of September 11th; and Kristen Breitweiser, Founder and
Co-Chairperson, September 11th Advocates, Member, Family Steering
Committee.

All three family members testified to the critical need for
major reform of the Intelligence Community, calling on the executive
and legislative branches to act promptly. All three witnesses strongly
supported the creation of a NID and NCTC, as recommended by the 9/11
Commission.

On August 26, 2004, the Committee held a closed hearing
entitled, `Reorganizing the Intelligence Community: to What Extent
Should the National Intelligence Director Have Budget Authority and the
National Counterterrorism Center Play a Role in Operational Planning?'.
Witnesses included: Larry Kindswater, Deputy Director of Central
Intelligence for Community Management, Central Intelligence Agency;
Stephen Cambone, Under Secretary of Defense for Intelligence, U.S.
Department of Defense; Arthur Cummings, Section Chief, International
Terrorism Operations Section I, Counterterrorism Division, Federal
Bureau of Investigation; Norton Schwartz, Director for Operations, J-3,
Joint Staff, U.S. Department of Defense; and CIA Counterterrorism
Specialist.

This hearing focused on budget and operational planning issues.

On September 8, 2004, the Committee held a hearing entitled,
`Building an Agile Intelligence Community to Fight Terrorism and
Emerging Threats'. Witnesses included: Robert Mueller III, Director,
Federal Bureau of Investigation; and John McLaughlin, Acting Director
of Central Intelligence, Central Intelligence Agency.

This hearing focused on the need to build an agile and flexible
intelligence community that can rapidly respond to emerging threats. As
heads of two agencies with primary responsibility for collecting
intelligence domestically and overseas, these witnesses provided the
Committee with their perspectives regarding the current state of the
intelligence community, improvements that have been made since 9/11 in
areas such as interagency cooperation and information sharing, and how
the creation of a National Intelligence Director and National
Counterterrorism Center can build upon that progress. Director Mueller
testified regarding the numerous improvements made by the FBI since
9/11 in collecting, analyzing and distributing intelligence, and he
identified three principles that should guide any attempt to reform the
intelligence community: (1) providing analysts transparency into
sourcing, (2) maintaining the operational chain of command, i.e., the
NID and the NCTC chief should not have operational authority over the
FBI or other agencies, and (3) the importance of protecting civil
liberties. Acting DCI McLaughlin emphasized the importance of giving
the NID real authority and direct access to analysts and other experts,
particularly at the CIA.

On September 13, 2004, the Committee held a hearing entitled,
`Ensuring the U.S. Intelligence Community Supports Homeland Defense and
Departmental Needs'. Witnesses included: Colin Powell, Secretary of
State; and Tom Ridge, Secretary of the Department of Homeland Security

This hearing focused on the needs of departmental consumers of
intelligence. Both Secretary Powell and Secretary Ridge supported the
creation of a strong National Intelligence Director with strong budget,
personnel and other authorities. Both witnesses affirmed that a strong
NID would improve the quality of the intelligence they receive. Both
witnesses also supported the concept of a cabinet-level joint
intelligence community council. Both witnesses opposed the concept of
dual-hatting.

On September 14, 2004, the Committee's Subcommittee on
Oversight of Government Management, the Federal Workforce and the
District of Columbia, chaired by Senator Voinovich, held a hearing
entitled, `9/11 Commission Human Capital Recommendations: A Critical
Element of Reform'. Witnesses included: Fred Fielding, Commissioner,
National Commission on Terrorist Attacks upon the United States, Jamie
Gorelick, Commissioner, National Commission on Terrorist Attacks Upon
the United States; Mark Bullock, Assistant Director of Administrative
Services, Federal Bureau of Investigation, John Turnicky, Special
Assistant to the DCI for Security, Central Intelligence Agency; Chris
Mihm, Managing Director, Strategic Issues, U.S. Government
Accountability Office; Paul Light, Senior Fellow, The Brookings
Institution; Morgan Kinghorn, President, National Academy of Public
Administration; Doug Wagoner, Chairman, Security Clearance Task Group,
Information Technology Association of America; and Max Stier,
President, Partnership for Public Service.

This hearing focused on personnel issues related to the reform
of the intelligence community recommended by the 9/11 Commission,
including the need to streamline the presidential appointments process,
to improve the security clearance system, to develop a specialized
national security and intelligence workforce at the FBI and to set
personnel standards across the intelligence community.

V. SECTION-BY-SECTION ANALYSIS

Section 1. Short Title; Table of Contents

Section 2. Definitions

Adds the National Intelligence Authority (NIA) to the membership of the `intelligence community.'

Defines `national intelligence' as intelligence that pertains
to the interests of more than one department or agency, excluding
counterintelligence or law enforcement activities conducted by the FBI
except as agreed between the National Intelligence Director (NID) and
the FBI Director.

Defines the `National Intelligence Program' to include: (i)
all national intelligence programs, projects, and activities of the
intelligence community; (ii) all programs, projects and activities of
the NIA, CIA, NSA, NGA, NRO, the DHS Office of Information Analysis,
and the FBI Office of Intelligence, whether or not they pertain to
national intelligence; and (iii) any other program, project, or
activity relating to national intelligence unless the NID and head of
the department, agency, or element concerned determine otherwise.
Except as provided under (ii), the NIP excludes any program, project,
or activity of the military (including those of the Defense
Intelligence Agency not under the National Foreign Intelligence
Program) that acquire intelligence principally to support tactical or
joint military operations.

TITLE I--NATIONAL INTELLIGENCE AUTHORITY

SUBTITLE A--NATIONAL INTELLIGENCE AUTHORITY

Section 101. National Intelligence Authority

Creates the National Intelligence Authority as an independent
establishment in the Executive Branch, composed of the Office of the
NID, the Inspector General of the NIA, the Ombudsman of the NIA, the
National Counterterrorism Center (NCTC), national intelligence centers
established by the NID, and other entities established by law, the
President, or the NID.

Provides that the primary missions of the National
Intelligence Authority are: (1) to unify and strengthen the efforts of
the intelligence community; (2) to ensure that such efforts are jointly
organized around intelligence missions rather than collection
disciplines; (3) to provide for the operation of the NCTC and national
intelligence centers; (4) to eliminate barriers that impede
counterterrorism activities between foreign intelligence activities
abroad and domestically, while ensuring the protection of civil
liberties; and (5) to establish clear responsibility and accountability
for counterterrorism and other national security intelligence matters.

Provides that the National Intelligence Authority shall have a seal.

Section 102. National Intelligence Director

The NID is nominated by the President and confirmed by the
Senate. The NID is prohibited from simultaneously serving in any
capacity in any other element of the intelligence community.

The NID shall (1) serve as the head of the intelligence
community; (2) act as the President's principal intelligence adviser;
(3) serve as the head of the National Intelligence Authority; and (4)
direct and oversee the National Intelligence Program.

SUBTITLE B--RESPONSIBILITIES AND AUTHORITIES OF THE NATIONAL INTELLIGENCE DIRECTOR

Section 111. Provision of National Intelligence

The NID is responsible for providing timely and objective
national intelligence to: (1) the President; (2) the heads of other
executive departments and agencies; (3) the Chairman of the Joint
Chiefs of Staff and senior military commanders; (4) the U.S. House and
Senate, and the committees thereof; and (5) such other persons or
entities as the President shall direct.

Section 112. Responsibilities of National Intelligence Director

The NID shall determine the annual budget for intelligence and
intelligence-related activities by: (1) providing to the heads of the
departments containing agencies or elements within the intelligence
community and that have one or more programs, projects, or activities
within the NIP, and to the heads of such agencies and elements,
guidance for development of the NIP budget pertaining to such agencies
or elements; (2) developing and presenting to the President an annual
budget for the NIP after consultation with the heads of those agencies
or elements, and the heads of their respective departments, (3)
providing budget guidance to each element of the intelligence community
that does not have one or more program, project, or activity within the
NIP regarding the intelligence activities of such element; and (4)
participating in the development by the Secretary of Defense of the
annual budgets for the military intelligence programs, projects, and
activities not included in the NIP.

The NID shall manage and oversee the National Intelligence
Program, including by executing funds, reprogramming funds, and
transferring funds and personnel under the NIP.

The NID shall establish requirements and priorities for
collection, analysis, and dissemination of national intelligence by
elements of the intelligence community. The NID shall also establish
collection and analysis requirements for the intelligence community,
determine collection and analysis priorities, issue and manage
collection and analysis tasking, and resolve conflicts in the tasking
of elements of the intelligence community within the National
Intelligence Program, except as otherwise agreed with the Secretary of
Defense pursuant to the direction of the President. Furthermore, the
NID shall provide advisory tasking on the collection of intelligence to
elements of the government not part of the intelligence community.

The NID shall oversee and manage the NCTC, and establish, oversee, and manage National Intelligence Centers.

The NID shall also establish requirements and priorities for
collection of intelligence under the Foreign Intelligence Surveillance
Act (FISA) and assist the Attorney General in ensuring that
intelligence derived from FISA operations is disseminated, but the NID
has no authority to direct or undertake FISA operations except as
otherwise authorized by statute or Executive order.

In consultation with the heads of the other elements of the
intelligence community, and the heads of their respective departments,
the NID shall develop personnel policies and programs for the
intelligence community that: (1) encourages and facilitates assignments
and details to the NCTC and national intelligence centers, and between
other elements of the intelligence community; (2) sets standards for
education, training, and career development; (3) encourages the
recruitment and retention of high-quality individuals; (4) ensures that
intelligence personnel are sufficiently diverse; (5) makes service in
more than one element of the intelligence community a condition for
promotion; (6) effectively manages intelligence community personnel who
are trained in community-wide matters; (7) provides for effective
management of human capital within the intelligence community; (8) is
consistent with public employment principles of merit and fitness; and
(9) includes the enhancements required under section 114.

The NID shall promote and evaluate the utility of national intelligence to consumers in the U.S. Government.

The NID shall ensure that appropriate officials have access to a variety of intelligence assessments and analytical views.

The NID shall: (1) protect intelligence sources and methods;
(2) establish reporting guidelines that maximize the dissemination of
information while protecting sources and methods; and (3) establish
requirements and procedures for: (a) the classification of information;
(b) access to classified information; and (c) dissemination of
classified information. The President acting through the NID shall
establish and implement uniform standards and procedures for granting
access to sensitive compartmented information.

The NID shall develop, in consultation with the heads of
relevant departments and agencies, an integrated communications network
that provides interoperable communications capabilities within the
intelligence community and with other entities or persons the NID
determines appropriate.

The NID shall establish standards for information technology and communications for the intelligence community.

The NID shall ensure that the intelligence community makes efficient and effective use of open-source information and analysis.

The NID shall ensure compliance by the intelligence community
with all laws, regulations, and policies, including those applicable to
protecting civil rights and civil liberties.

The NID shall eliminate waste and unnecessary duplication
within the intelligence community and perform other functions as
directed by the President.

The NID shall, in consultation with the heads of relevant
departments and agencies, direct and coordinate the performance by the
elements of intelligence community within the NIP of such services that
are of common concern which the NID determines can be more efficiently
performed in a consolidated manner, including research and development.

The NID may prescribe regulations relating to the discharge and enforcement of the responsibilities under this section.

The NID shall perform such other functions as the President may direct.

Section 113. Authorities of National Intelligence Director

The NID shall have access to all national intelligence, unless otherwise directed by the President.

The NID shall determine the annual budget for intelligence and
intelligence-related activities by: (1) providing to the heads of the
departments containing agencies or elements within the intelligence
community and that have one or more programs, projects, or activities
within the NIP, and to the heads of such agencies and elements,
guidance for development of the NIP budget pertaining to such agencies
or elements; (2) developing and presenting to the President an annual
budget for the NIP after consultation with the heads of agencies or
elements, and the heads of their respective departments, including, in
furtherance of such budget, the review, modification, and approval of
budgets of the agencies or elements of the intelligence community with
one or more programs, projects, or activities within the NIP utilizing
the budget authorities in subsection (c)(1); (3) providing guidance on
the development of annual budgets for each element of the intelligence
community that does not have any program, project, or activity within
the NIP utilizing the budget authorities in subsection (c)(2); (4)
participating in the development by the Secretary of Defense of the
annual budget for military intelligence programs and activities outside
the NIP; (4) receiving the appropriations for the NIP as specified in
subsection (d) and allotting and allocating funds to agencies and
elements of the intelligence community; and (5) managing and overseeing
the execution by the agencies or elements of the intelligence
community, and, if necessary, the modification of the annual budget for
the NIP, including directing the reprogramming and transfer of funds,
and the transfer of personnel, among and between elements of the
intelligence community within the NIP utilizing the authorities in
subsections (f) and (g).

In developing the annual National Intelligence Program budget,
the NID shall coordinate, prepare, and present to the President an
annual budget for elements of the intelligence community that are
within the National Intelligence Program, in consultation with the
heads of such elements. The NID shall approve budget submissions from
such elements, and may require modifications to meet NID priorities,
before approving such budgets for submission to the President.

Regarding elements of the intelligence community not within
the National Intelligence Program, the NID shall provide guidance for
the development of their budgets. The heads of such components, and the
heads of their respective departments, shall coordinate closely with
the NID before submitting their budgets to the President.

Any amounts appropriated or otherwise made available to the
National Intelligence Program shall be appropriated to the NIA and
under the NID's direct jurisdiction. The NID shall manage and oversee
the execution of National Intelligence Program funds by any
intelligence community element which receives such funds.

The Secretary of the Treasury shall, in consultation with the
NID, establish accounts for the funds under the jurisdiction of the
NID.

National Intelligence Program funds may not be reprogrammed or
transferred by an element of the intelligence community without NID
approval. Department heads shall consult with the NID before
reprogramming non-National Intelligence Program funds of departmental
entities within the intelligence community. The NID shall consult with
the affected department head prior to reprogramming funds of an element
of the intelligence community within the NIP. The NID shall consult
with the appropriate committees of Congress regarding modifications of
existing procedures to expedite the reprogramming of funds within the
NIP, including procedures for notifying Congress of department or
agency objections to a reprogramming by the NID.

With the approval of the Office of Management and Budget and
after consultation with the affected department or agency, the NID may
(1) transfer or reprogram funds from one intelligence community element
funded by the National Intelligence Program to another; (2) review, and
approve or disapprove, any proposal to transfer or reprogram funds from
non-NIP appropriations to NIP appropriations; (3) in accordance with
procedures developed by the NID, transfer personnel of an element of
the intelligence community funded by the NIP to another element of the
intelligence community; and (4) in accordance with procedures developed
by the NID and the heads of the departments and agencies concerned,
transfer personnel of an element of the intelligence community funded
outside the NIP to another element of the intelligence community. The
NID may only make such a transfer if the funds or personnel are being
transferred to a higher priority, the funds are not being transferred
to the NID Reserve for Contingencies, and the transfer does not exceed
applicable ceilings established in law. The NID shall notify the
Appropriations Committees of the House and the

Senate, Senate Select Committee on Intelligence, and the House
Permanent Select Committee on Intelligence of all transfers. In
addition, the NID shall notify the Armed Services Committees of
transfers involving Defense Department personnel; the Judiciary
Committees of transfers involving FBI personnel; and the Senate
Committee on Governmental Affairs and the House Committee on Homeland
Security of transfers involving Department of Homeland Security
personnel.

The NID shall oversee and direct the Director of the Central
Intelligence Agency in coordinating the relationships between elements
of the intelligence community and their counterparts in foreign
governments on all matters relating to national security intelligence
or involving intelligence acquired through clandestine means.

The NID shall establish and maintain within the intelligence
community an effective and efficient open source information
capability.

The head of each element of the intelligence community shall
promptly provide the NID such information as the NID may request to
facilitate the NID's authorities and responsibilities, except as
otherwise directed by the President.

Section 114. Enhanced Personnel Management

The NID shall prescribe regulations to provide incentives
(e.g., bonuses) for intelligence community personnel to serve on the
staffs of the NCTC, national intelligence centers, and other
community-management positions.

The NID shall ensure that intelligence personnel who are
assigned or detailed for service under the NID shall be promoted at
rates equivalent to or better than personnel who did not serve in such
capacities.

The NID shall prescribe mechanisms to facilitate the personnel
rotation across the intelligence community in order to facilitate the
widest possible understanding of the variety of intelligence
requirements, methods, and disciplines. Such mechanisms may include:
(1) establishing a special occupational category for intelligence
personnel who wish to serve in more than one element of the
intelligence community; (2) providing awards for such service; and (3)
establishing requirements for education, training, service, and
evaluation for such service. It is the sense of Congress that such
mechanisms should seek to duplicate joint officer management policies
established by the Goldwater-Nichols Department of Defense
Reorganization Act of 1986.

Section 115. Security Clearances

Requires the President, in consultation with the NID and
others, to establish, and ensure the implementation of, uniform
standards and procedures for access to classified information for both
employees and contract personnel and to ensure reciprocity among
executive branch agencies for clearances. Under (b), the section
requires the President to designate a single federal agency to be
responsible for providing and maintaining clearances. The agency
selected would be tasked with establishing and maintaining a database
of all clearances.

Section 116. National Intelligence Reserve Corps

The NID may provide for the establishment and training of a
National Intelligence Reserve Corps for the temporary reemployment on a
voluntary basis of former intelligence community employees during times
of emergency.

The NID shall recommend to the President an individual to fill a vacancy in the position of CIA Director.

The NID shall obtain the concurrence of the Secretary of
Defense before recommending to the President an individual to fill a
vacancy in the position of Director of the National Security Agency;
Director of the National Reconnaissance Office; or Director of the
National Geospatial-Intelligence Agency. If the Defense Secretary does
not concur in the recommendation, the NID may still make the
recommendation, but must include with the recommendation a statement
that the Secretary does not concur.

The head of the appropriate department or agency shall obtain
the concurrence of the NID before appointing or recommending to the
President for appointment the Under Secretary of Defense for
Intelligence; the Director of the Defense Intelligence Agency; the
Assistant Secretary of Homeland Security for Information Analysis; and
the Executive Assistant Director for Intelligence of the FBI. If the
NID does not concur, the secretary or agency head may appoint or
recommend the official for appointment, but must notify the President
of the lack of concurrence.

The NID may recommend any official covered by this section for
termination to the President or head of the appropriate department or
agency. The NID must seek the concurrence of the head of the affected
department or agency. If there is no concurrence, the NID may still
make the recommendation, but must notify the President of the lack of
concurrence.

Section 118. Reserve for Contingencies of the National Intelligence Director

This section establishes a Reserve for Contingencies of the NID
consisting of amounts appropriated to, transferred to, or deposited in
the Reserve to be used for purposes as are provided for by law. All
unobligated balances of the CIA Reserve for Contingencies shall be
transferred to this fund on the date of enactment.

SUBTITLE C--OFFICE OF THE NATIONAL INTELLIGENCE DIRECTOR

Section 121. Office of the National Intelligence Director

There is within the National Intelligence Authority, an Office
of the National Intelligence Director with the function of helping the
NID in carrying out the duties and responsibilities of the NID. The
Office of the NID shall have a professional staff that includes
transferred elements of the Community Management Staff.

The Office of the NID consists of the Principal Deputy NID;
any other Deputy NID appointed under 122(b); the National Intelligence
Council; the General Counsel of the NIA; the Intelligence Comptroller;
the Office for Civil Rights and Civil Liberties of the NIA; the Privacy
Officer of the NIA; the Chief Information Officer of the NIA; the Chief
Human Capital Officer of the NIA; the Chief Financial Officer of the
NIA; the National Counterintelligence Executive; and such other offices
and officials as may be established by law or the NID may establish or
designate. The National Intelligence Council and the National
Counterintelligence Executive currently exist and are being transferred
to the Office of the NID.

As of October 1, 2006 the Office of the NID may not co-locate with any other element of the intelligence community.

Section 122. Deputy National Intelligence Directors

There is a Principal Deputy NID recommended by the NID and
appointed by the President with the advice and consent of the Senate,
who may not serve in any other capacity in any other element of the
intelligence community. This official shall assist the NID in carrying
out the duties and responsibilities of the NID, and shall act for the
NID during an absence or vacancy.

There shall be not more than four Deputy NIDs, all of whom
shall be appointed by the President. The Deputy NIDs shall be
recommended by the NID to the President and shall have such duties,
responsibilities, and authorities as assigned by the NID or as
specified by law.

Section 123. National Intelligence Council

The National Intelligence Council shall be composed of senior
intelligence community analysts and substantive experts from the public
and private sector who shall be appointed by, report to, and serve at
the pleasure of the NID.

The Council shall produce national intelligence estimates,
including alternative views held by elements of the intelligence
community; evaluate community-wide collection and production of
intelligence; and otherwise assist the NID in carrying out the NID's
responsibilities under 111.

The NID shall ensure that each national intelligence estimate
(1) states separately and distinguishes between the intelligence
underlying such estimate and the assumptions and judgments of analysts
with respect to such intelligence and estimate; (2) describes the
quality and reliability of the intelligence underlying such estimate;
(3) presents and explains alternative conclusions, if any, with respect
to the intelligence underlying such estimate and such estimate; and (4)
characterizes the uncertainties, if any, and the confidence in such
estimate.

The Council has the authority to contract. In addition, its
staff shall be provided by the NID and support shall be provided as
appropriate by the heads of the elements of the intelligence community.

Section 124. General Counsel of the National Intelligence Authority

The General Counsel of the NIA shall be appointed by the
President from civilian life with the advice and consent of the Senate.
This official is the chief legal officer of the NIA and shall perform
such functions as the NID shall prescribe. An official serving in this
position may not also serve as General Counsel of any other department,
agency, or element of the United States government.

Section 125. Intelligence Comptroller

The NID shall appoint an Intelligence Comptroller from civilian
life who shall report directly to the NID. This official shall assist
the NID in preparing and executing the budget of the NIP; assist the
NID in participating in the Defense Secretary's annual budget for
military intelligence and activities outside of the

NIP; provide unfettered access to the NID to financial
information under the NIP; and perform other duties as may be
prescribed by the NID or specified by law.

Section 126. Officer for Civil Rights and Civil Liberties of the National Intelligence Authority

The President shall appoint an Officer for Civil Rights and
Civil Liberties of the National Intelligence Authority who shall report
directly to the NID.

This official shall assist the NID in ensuring that the
protection of civil rights and civil liberties is appropriately
incorporated in the policies and procedures developed for and
implemented by the NIA, those regarding the relationships among the
elements of the intelligence community within the NIP, and those
regarding the relationships between the elements of the intelligence
community within the NIP and the other elements of the intelligence
community. This official shall also oversee compliance by the NIA with
the Constitution and all laws and rules relating to civil rights and
civil liberties regarding the same.

This official shall also review, investigate, and assess
complaints and other information regarding possible abuses of civil
rights or civil liberties in the administration of the NIA and in
relationships among the elements of the intelligence community within
the NIP or between those elements and non-NIP elements, unless the
NIA's IG determines that the IG can better review the matter.

This official shall coordinate with the NIA Privacy Officer
and perform such other duties and may be prescribed the NID or
specified by law.

Section 127. Privacy Officer of the National Intelligence Authority

The NID shall appoint a Privacy Officer of the NIA. This
official shall have primary responsibility for the privacy policy of
the NIA and shall coordinate with the NIA Officer for Civil Rights and
Civil Liberties.

Section 128. Chief Information Officer of the National Intelligence Authority

The NID shall appoint a Chief Information Officer of the NIA.
The NIA CIO shall assist the NID in developing and implementing an
integrated communications network that provides interoperable
communications capabilities among all elements of the intelligence
community.

The NID shall appoint a Chief Human Capital Officer to assist
the NID with the development and implementation of workforce management
strategies for the intelligence community.

Section 130. Chief Financial Officer

There is a Chief Financial Office of the National Intelligence
Authority, who shall be designated by the President in consultation
with the NID.

Section 131. National Counterintelligence Executive

This position is moved to the Office of the National
Intelligence Director. The National Counterintelligence Executive
serves as the head of national counterintelligence for the United
States government; chairs the National Counterintelligence Policy
Board; and heads the Office of the National Counterintelligence
Executive (also moved to the Office of the NID).

SUBTITLE D--ADDITIONAL ELEMENTS OF NATIONAL INTELLIGENCE AUTHORITY

Section 141. Inspector General of the National Intelligence Authority

This section is structured similarly to 50 U.S.C. Sec. 403q,
which creates the CIA's Inspector General. This section gives the
Inspector General of the NIA authorities over the NIA that largely
track the CIA Inspector General's authorities over the CIA. The
significant difference between the two is that this section gives the
NIA Inspector General the authority to initiate and conduct independent
investigations, inspections, and audits relating to the relationships
among the elements of the intelligence community within the National
Intelligence Program, and between those elements and the other elements
of the intelligence community. By contrast, the CIA Inspector General's
authorities do not extend to the relationships between elements of the
intelligence community; instead, they focus on the CIA.

Section 141(a) establishes an Office of the Inspector General within the NIA.

Section 141(b) establishes the purposes of the OIG, which
include creating an objective and effective office to conduct
independent investigations, inspections, and audits; providing a means
to keep the NID fully informed of problems and deficiencies; and
ensuring that the congressional intelligence committees are kept
informed.

Section 141(c) provides that the head of the OIG shall be the
Inspector General of the NIA and that the Inspector General shall be
appointed by the President with the advice and consent of the Senate.
This section also requires that the IG be selected without regard to
political affiliation and solely on the basis of integrity, compliance
with the security standards, and prior experience in the field of
intelligence or national security as well as on a demonstrated ability
in accounting, financial analysis, law, management analysis, public
administration, or auditing. This section also requires that the IG
report directly to the NID. This section states that the IG may only be
removed by the President and that the President must submit the reasons
for such removal to the congressional intelligence committees.

Section 141(d) establishes the duties and responsibilities of
the IG including providing policy direction for, and to plan, conduct,
and coordinate independently, the investigations, inspections, and
audits relating to the programs and operations of the NIA; keeping the
NID informed of violations of law, regulations, civil liberties,
privacy, fraud, and other deficiencies; taking due regard for the
protection of intelligence sources and methods in the preparation of
reports; and complying with generally accepted government auditing
standards.

Section 141(e) allows the NID to prohibit the IG from
initiating or carrying out an investigation, inspection, or audit if
the NID determines it is vital to national security, but requires the
NID to submit to the intelligence committees the reasons for the
prohibition and allows the IG to submit any relevant comments to the
intelligence committees.

Section 141(f) requires that the IG have direct and prompt
access to the NID; any employee or contractor; and any other element of
the intelligence community within the National Intelligence Program.
This section also requires that the IG have access to all relevant
records, reports, audits, reviews, and other documents. The IG is also
authorized to receive and investigate complaints or information from
any person concerning violations of law, rules, regulations,
mismanagement, waste, abuse, and substantial danger to public health
and safety. Requires the IG not to disclose the identity of such an
employee, without consent, and restricts reprisals against an employee
for making a complaint to the IG. This section provides the IG with
subpoena authority and establishes guidelines for the use of the
authority.

Section 141(g) requires that the IG be provided appropriate
office space and supplies; allows the IG to appoint and employ staff;
and allows the IG to request information and assistance from any
department, agency, or other element of the government, with the
concurrence of the NID.

Section 141(h) establishes a semi-annual reporting requirement
by the IG to the NID, who in turn would be required to transmit the
reports to the congressional intelligence committees together with any
comments of the NID. The section also requires the IG to immediately
report to the NID any serious or flagrant problems, abuses, or
deficiencies and requires the NID to transmit those reports to the
intelligence committees. The section also establishes additional
reporting requirements in certain circumstances, such as when a matter
is referred to Justice because of possible criminal conduct, an
investigation should focus on a person who is Senate-confirmed, and
when the IG is unable to resolve differences with the NID. The section
also establishes procedures employees may follow prior to making any
reports directly to the Congress.

Section 141(i) requires the NID to establish a separate budget account for the OIG.

Section 142. Ombudsman of the National Intelligence Authority

This section creates an Ombudsman in the National Intelligence
Authority, appointed by the NID, who will have the authority to: (i)
counsel, arbitrate, offer recommendations on, and initiate
investigations into problems of politicization, biased reporting, or
the lack of objective analysis within the NIA or any element of the
National Intelligence Program; (ii) monitor the effectiveness of
measures taken in response to such problems; and (iii) conduct reviews
of the analytic products of the NIA or any element of the intelligence
community within the NIP, or of any analysis of national intelligence
by any element of the intelligence community. This office is patterned
after the CIA Ombudsman.

There shall be an Analytic Review Unit within the Office of
the Ombudsman which shall assist in the performance of the duties of
the Ombudsman, including by conducting detailed evaluations of
intelligence by the National Intelligence Council, the elements of the
intelligence community within the NIP, and, to the extent involving the
analysis of national intelligence, other elements of the intelligence
community.

The Ombudsman shall, unless otherwise directed by the
President, have access to all analytic products, field reports, and raw
intelligence of any element of the intelligence community and to any
reports or other material of an Inspector General that might be
pertinent.

This official will provide the NID and the congressional
intelligence committees with an annual report that includes an
assessment of the current level of politicization, biased reporting, or
the lack of objective analysis within the NIA, any element of the
intelligence community within the NIP, or any analysis of

national intelligence by an element of the intelligence
community. The report shall also include suggestions for remedial
measures and the effectiveness of remedial measures taken.

In addition to carrying out activities under this section, the
Ombudsman of the NIA may refer serious cases of misconduct related to
politicization of intelligence information, biased reporting, or lack
of objective analysis within the intelligence community to the
Inspector General of the NIA for investigation.

Section 143. National Counterterrorism Center

The NCTC is created within the NIA and shall be headed by a
Director appointed with the advice and consent of the Senate, who may
not simultaneously serve in any other capacity in the intelligence
community. The primary missions of the NCTC shall be to unify strategy
for civilian and military counterterrorism efforts, integrate
counterterrorism intelligence activities both inside and outside of the
United States, and ensure that the collection of counterterrorism
intelligence and the conduct of counterintelligence operations are
informed by the analysis of all-source information. Another primary
mission of the NCTC shall be to develop interagency counterterrorism
plans that include the mission, objectives to be achieved, course of
action, coordination of agency operational activities, recommendations
for operational plans, and assignment of departmental or agency
responsibilities.

The NCTC Director reports to the NID on the budget and
programs of the NCTC and the activities of the NCTC Directorate of
Intelligence. The Director of the NCTC reports to the President and the
NID on the planning and progress of joint counterterrorism operations.

At the direction of the President, the NSC, and the NID, the
Director of the NCTC shall: (1) serve as the principal adviser to the
President on joint counterterrorism operations; (2) provide unified
strategic direction for civilian and military counterterrorism efforts
and for the effective integration and deconfliction of counterterrorism
and intelligence and operations across agency boundaries, inside and
outside of the United States; (3) advise the President on the extent to
which agency and departmental counterterrorism program recommendations
and budget proposals conform to priorities established by the President
and the NSC; (4) concur in, or advise the President on, the selection
of personnel to head operating entities specified in (f) with principal
missions relating to counterterrorism; and (5) perform such other
duties as the NID may prescribe.

The NCTC Director has the right to concur in the appointment,
or in the recommendation to the President (as the case may be), of the
Director of the CIA's Counterterrorism Center; the Assistant Director
of the FBI's Counterterrorism Division; the State Department's
Coordinator for Counterterrorism; and the heads of other entities so
designated that have principle missions relating to counterterrorism.
If the Department head making the appointment or recommendation does
not accept the NCTC Director's recommendation, the appointment or
recommendation may still go forward, but the NCTC Director's objection
must be passed along to the President.

The NCTC shall have a Directorate of Intelligence, which will
include the Terrorist Threat Integration Center (transferred to the DI
under 323). The Directorate shall have primary responsibility for
analysis of terrorism and terrorist organizations for all sources,
whether collected inside or outside the United States. The Directorate
shall be the primary repository for all-source information on suspected
terrorists, their organizations, and their capabilities; propose
intelligence collection requirements for action by elements of the
intelligence community inside and outside the United States; have
primary responsibility for net assessments and warnings about terrorist
threats, which assessments and warnings shall be based on a comparison
of terrorist intentions and capabilities with assessed national
vulnerabilities and countermeasures; and perform such other duties and
functions as the NCTC Director may prescribe.

The NCTC shall have a Directorate of Planning with the primary
responsibility for developing interagency counterterrorism plans. The
Directorate shall provide guidance and develop strategy and interagency
plans based on policy objectives and priorities established by the NSC;
develop interagency plans utilizing input from personnel in other
departments and agencies with expertise; assign responsibilities for
counterterrorism operations to departments and agencies; monitor the
implementation of operations so assigned and update interagency plans
as necessary; report to the President and the NID on the compliance
with such plans; and perform such other duties and functions as the
NCTC Director may prescribe.

The Directorate of Planning may not direct the execution of operations that it assigns.

The NID may appoint deputy directors for the NCTC as
appropriate. In order to provide a professional staff for the NCTC, the
NID may establish positions in the excepted service as appropriate. The
NID shall ensure that the analytical staff of the NCTC is comprised of
experts from the intelligence community and elsewhere as appropriate.
In order to do so, the NID shall specify the transfers, assignments,
and details of personnel funded within the NIP; for personnel not
funded within the NIP, the NID shall request such transfers,
assignments, and details from the relevant department head, who shall,
to the extent practicable, approve the request. This staff will be
under the authority, direction, and control of the NCTC Director.

The NID shall ensure that the NCTC staff has access to all
relevant databases maintained by elements of the intelligence
community.

Other agencies shall support and assist the NCTC, including by
implementation of plans developed by the NCTC. If there is a
disagreement on the implementation of such a plan between the NCTC
Director and the head of an affected department or agency, then the
NCTC may either accede to the head of the department or agency or
notify the President of the necessity of resolving the disagreement.

Section 144. National Intelligence Centers

The NID may establish within the NIA one or more centers to
address intelligence priorities established by the NSC. Each center
shall be assigned an area of intelligence responsibility.

The NID shall assign lead responsibility for administrative
support for each center to an element of the intelligence community.
The NID shall determine the structure and size of each center and shall
notify Congress before the establishment of a center.

Each center shall be headed by a Director appointed by the
NID, who shall serve as the principal advisor to the NID on
intelligence matters within the area of intelligence responsibility
assigned to that center. The Director shall also manage the operations
of the center; coordinate administrative support for the center; submit
budget and personnel requests for the center to the NID; seek such
assistance as necessary and needed to fulfill the mission of the
center; and advise the NID of the center's information technology,
personnel, and other requirements.

Each center shall, in its area of responsibility, have primary
responsibility for providing all-source analysis of intelligence; have
primary responsibility for identifying and proposing to the NID
intelligence collection and analysis requirements; have primary
responsibility for net assessments and warnings; ensure that
appropriate officials have access to a variety of intelligence
assessments and analytical views; and perform such other duties as the
NID shall specify.

The NID shall ensure that the centers and other elements of
the intelligence community engage in appropriate information sharing to
facilitate the activities of the centers. The Directors of the centers
shall report to the NID regarding their activities and coordinate with
the Principal Deputy NID regarding such activities.

In order to provide a professional staff for a center, the NID
may establish positions in the excepted service as appropriate. The NID
shall specify the transfers, assignments, and details of personnel
funded within the NIP; for personnel not funded within the NIP, the NID
shall request such transfers, assignments, and details from the
relevant department head, who shall, to the extent practicable, approve
the request. This staff will be under the authority, direction, and
control of the Director of the center.

The NID may terminate a center if the NID determines that the
center is no longer required to meet an intelligence priority
established by the NSC. The NID must notify Congress before carrying
out such termination.

SUBTITLE E--EDUCATION AND TRAINING OF INTELLIGENCE COMMUNITY PERSONNEL

Section 151. Framework for Cross-Disciplinary Education and Training

This section requires the NID to establish a framework that
brings together the educational components of the intelligence
community to promote a more effective and productive intelligence
community through joint and cross-disciplinary education and joint
training.

Section 152. Intelligence Community Scholarship Program

This section requires the NID to develop a scholarship program
under which intelligence community agencies would provide college
scholarships to students in exchange for future service at the agency.
The provision reserves 10 percent of the scholarships for intelligence
community employees as an additional means for training.

SUBTITLE F--ADDITIONAL AUTHORITIES OF NATIONAL INTELLIGENCE AUTHORITY

Section 161. Use of Appropriated Funds

If specifically authorized to dispose of real property, the NID
shall exercise such authority in compliance with subchapter IV of
chapter 5 of title 40, United States Code; the NID shall deposit
proceeds from such disposal in the Treasury. Gifts or donations of
services or property of or for the NIA shall only be accepted if
permitted by an appropriations act.

Section 162. Acquisitions and Fiscal Authorities

This section provides that the NID shall have acquisition
authority similar to that of the Director of Central Intelligence, as
head of the CIA. It also provides that the NID shall have milestone
decision authority for acquisitions of major systems funded by the NIP
and requires that the NID establish a major system acquisition
management framework similar to that utilized by DOD for defense
acquisition programs. This provides the NID with management authority
over acquisition programs funded by the NIA even if those programs are
conducted by other agencies such as DOD.

Section 163. Personnel Matters

This section grants the NID the same personnel authorities over
NIA employees that the DCI has over CIA personnel. The provision makes
clear that employees and applicants for employment of the NIA have the
same rights and protections as CIA employees.

Section 164. Ethics Matters.

This section makes conforming amendments to the Ethics in Government Act and other for the NIA.

TITLE II--OTHER IMPROVEMENTS OF INTELLIGENCE ACTIVITIES

SUBTITLE A--IMPROVEMENTS OF INTELLIGENCE ACTIVITIES

Section 201. Availability to Public of Certain Intelligence Funding Information

This section requires the President and Congress to disclose to
the public the top line budget authorization and appropriation figures
for the National Intelligence Program. This section also directs the
NID to study the feasibility of disclosing such aggregate information
for each element of the intelligence community and to submit a report
to Congress on the results within 180 days.

Section 202. Merger of Homeland Security Council Into National Security Council

This section merges the Homeland Security Council into the National Security Council.

Section 203. Joint Intelligence Community Council

This section establishes the Joint Intelligence Community
Council, which consists of the NID (who shall chair the Council), the
Secretary of State, the Secretary of the Treasury, the Secretary of
Defense, the Attorney General, the Secretary of Energy, the Secretary
of Homeland Security, and such other officers as the President may
designate. The JICC shall meet upon the request of the NID.

The JICC shall assist the NID in developing and implementing a
joint, unified national intelligence effort to protect national
security by (i) advising the NID on establishing requirements,
developing budgets, financial management, and monitoring and evaluating
the intelligence community's performance; and (ii) ensuring the timely
execution of programs, policies, and directives established or
developed by the NID.

Section 204. Improvement of Intelligence Capabilities of the Federal Bureau of Investigation

Section 204 of the bill acknowledges that the National
Commission on Terrorist Attacks Upon the United States stated in its
final report that, under Director Robert Mueller, the FBI has made
significant progress in improving its intelligence capabilities. The
Commission also urged the FBI to fully institutionalize the shift to a
preventative counterterrorism posture. In order to continue to improve
the intelligence capabilities of the Bureau, the FBI is required to
develop and maintain a national intelligence workforce consisting of
agents, analysts, linguists, and surveillance specialists who are
recruited, trained, and rewarded in a manner consistent with the
intelligence mission of the Bureau. This section of the bill also
requires agents to be trained in criminal justice and national
intelligence matters, and requires that agents be given the opportunity
to be assigned intelligence responsibilities early in their career. In
addition, the FBI Director shall establish career positions in
intelligence matters for agents and analysts, and afford agents and
analysts of the Bureau the opportunity to work in the career specialty
selected by such agents and analysts over their entire career with the
Bureau. The FBI Director shall carry out a program to enhance the
capacity of the FBI to recruit and retain individuals with skills
relevant to the intelligence mission of the Bureau. The Bureau should
also afford its analysts career opportunities commensurate with those
afforded analysts in other intelligence community entities.

This section also directs the FBI to ensure that each
operational intelligence supervisor be a certified intelligence
officer. The Director shall ensure that the successful discharge of
advanced training courses, and of one or more assignments to another
element of the intelligence community, is a precondition to advancement
to higher level intelligence assignments in the Bureau. Field

Intelligence Group (FIG) supervisors must report directly to a
senior manager responsible for intelligence matters, and must ensure
the integration of analysts, agents, linguists, and surveillance
personnel in the field.

The Bureau is also directed to expand its secure facilities to
ensure the successful discharge by the field intelligence components of
the national security and criminal intelligence missions of the FBI.

The bill directs the FBI to modify its budget structure, in
consultation with the Director of the Office of Management and Budget,
according to the four principal missions of the Bureau: (1)
Intelligence; (2) Counterterrorism and counterintelligence; (3)
Criminal Enterprises/Federal Crimes; (4) Criminal justice services.

Not later than 180 days after the enactment of this Act, the
FBI is required to submit to Congress a report detailing the Bureau's
progress in carrying out the requirements of Section 204. The Bureau is
also required to include in each annual program review of the FBI
submitted to Congress a report on the progress made by each field
office in implementing national program priorities. Not later than 180
days after the enactment of this Act, and annually thereafter, the FBI
shall submit a report to Congress assessing the qualifications, status,
and roles of FBI analysts. Additionally, not later than 180 days after
the enactment of this act, and annually thereafter, the FBI shall
submit a report to Congress detailing the Bureau's progress in
implementing information-sharing principles.

Section 205. Federal Bureau of Investigation Intelligence Career Service

Section 205 of the bill establishes an intelligence career
service for Federal Bureau of Investigation analysts. The FBI Director,
in consultation with the Director of the Office of Personnel
Management, may establish positions for intelligence analysts, without
regard to chapter 51 of title 5, United States Code. The Director shall
prescribe procedures for establishing and classifying such positions,
and may fix the rate of pay for such positions, without regard to
subchapter III of chapter 53 of title 5, United States Code, as long as
the rate of pay is not greater than the rate of pay payable for level
IV of the Executive Schedule.

The bill requires that any performance management system
established for intelligence analysts have at least one level of
performance above a retention standard.

Not less than sixty days before the date of implementation of
authorities granted under this section, the FBI Director shall submit
an operating plan describing the Director's intended use of the
authorities to: (1) the Committees on Appropriations of the Senate and
the House of Representatives; (2) the Committee on Governmental Affairs
of the Senate; (3) the Committee on Government Reform of the House of
Representatives; (4) the congressional intelligence committees; and (5)
the Committees on the Judiciary of the Senate and the House of
Representatives.

Also, no later than December 31, 2005, and annually thereafter
for four years, the FBI Director shall submit an annual report of the
use of the permanent authorities provided under this section during the
preceding fiscal year to: (1) the Committees on Appropriations of the
Senate and the House of Representatives; (2) the Committee on
Governmental Affairs of the Senate; (3) the Committee on Government
Reform of the House of Representatives; (4) the congressional
intelligence committees; and (5) the Committees on the Judiciary of the
Senate and the House of Representatives.

Section 206. Information Sharing

Consistent with the 9/11 Commission Report and reports issued
by the Markle Foundation's Task Force on National Security in the
Information Age, the legislation mandates that the President create an
information network that can be accessed, and to which contributions
can be made, by various, federal, state, tribal and local, and private
sector entities.

Sections 206(a) and (b) include definitions and findings.

Section 206(c) requires the President to establish a trusted
information network and secure information sharing environment (the
`Network') to promote the sharing of intelligence and homeland security
information in a manner consistent with national security and the
protection of privacy and civil liberties. The section outlines the
required attributes of the Network, including that it be decentralized
and allow information sharing horizontally across agencies, vertically
between levels of government and, as appropriate, with the private
sector; build on existing systems capabilities; incorporate protections
for privacy and civil liberties; and, to enhance accountability and
facilitate oversight, employ authentication, access controls, audit
capabilities and other mechanisms.

Section 206(d) requires that within 90 days, that the Director
of OMB, in consultation with the Executive Council established below,
(1) submit to the President and Congress a description of the
technological, legal, and policy issues presented by creation of the
Network and how these will be addressed; (2) establish electronic
directory services to assist in locating relevant people and
information; and (3) conduct a baseline review of current federal
agency information sharing capabilities.

Section 206(e) requires that, within 180 days, the President
(1) issue guidelines for acquiring, accessing, sharing, and using
terrorism information; (2) issue guidelines to protect privacy and
civil liberties in the development and use of the Network; (3) require
federal agencies to promote a culture of information sharing through
greater incentives and reduced disincentives for information sharing.

Section 206(f) requires that, within 270 days, the Director of
OMB, in consultation with the Executive Council, prepare and submit to
the President and Congress an Enterprise Architecture and
Implementation plan. The plan is to include a description of the
functions, capabilities and resources of the proposed Network; a
delineation of the roles of the federal agencies that are to
participate in the development of the Network; a description of the
system design that will meet the technological requirements to link and
enhance existing networks; an enterprise architecture; a description of
how privacy and civil liberties will be protected in the design and
implementation of the Network; a plan and time line for the development
and implementation of the Network; budgetary requirements; and
proposals for any legislation that the Director of OMB believes to be
necessary to implement the Network.

Section 206(g) gives the Director of OMB the responsibility,
in consultation with the Executive Council, for implementing and
managing the Network; developing policies and guidelines to foster the
development and proper operation of the Network; and assisting,
monitoring and assessing the implementation of the Network by
individual departments and agencies. It also requires that the
Director, within 30 days, appoint an official, with the equivalent of
Deputy Director rank, whose primary responsibility will be to carry out
the day-to-day duties of the OMB Director with respect to information
sharing.

Section 206(h) establishes an Executive Council on Information
Sharing. The Executive Council is to be chaired by the Director of OMB
and made up of key federal officials (including officials from the NIA,
DHS, DoD, DOJ, the State Department) and state, local, and tribal
officials, and individuals from private or nonprofit entities that own
or operate critical infrastructure, to be appointed by the President.
The Council is to assist the Director of OMB in his responsibilities
with respect to the Network; ensure that there is coordination among
Network participants; review ongoing policy, legal and technology
issues; and establish a dispute resolution process to resolve
disagreements among agencies about whether particular information is to
be shared and in what manner.

Section 206(i) establishes an Advisory Board on Information
Sharing. The Advisory Board is to be made up of no more than 15 members
with significant experience or expertise in policy, technical and
operational matters, to be appointed by the President from outside the
federal government. The Board is to advise the President and the
Executive Council on policy, technical, and management issues related
to the design and implementation of the Network.

Section 206(j) requires the President, through the Director of
OMB, to report semiannually to Congress on the state of the Network.
The report is to include a general progress report on implementation of
the Network, as well as information on how the Network is performing
with respect to a variety of specific considerations.

Section 206(k) requires the head of each agency participating
in the Network to ensure (1) full agency compliance with Network
guidelines and procedures; (2) the provision of activities resources to
support operation of and participation in the Network; and (3) full
agency cooperation in the development of the Network and in the
management and acquisition of information technology consistent with
applicable law.

Section 206(l) requires each agency participates in the
Network to submit to OMB within one year, reports that include the
agency's strategic plan, objective performance measures, and budgetary
requirements for implementing the Network within the agency and
increasing information sharing. Requires annual agency reports
thereafter assessing the agency's progress in complying with the
Network's requirements and outlining the agency's future plans for
Network implementation.

Requires that, within one year after enactment of the Act and
periodically thereafter, the Comptroller General review and evaluate
the implementation of the Network to determine the extent of compliance
with the Network's requirements and to assess the effectiveness of the
Network both in improving information sharing and in protecting civil
liberties; the Comptroller General is to report to Congress on his
findings. Also directs the Inspectors General of relevant federal
agencies to, at their discretion, conduct audits or investigations to
assess their agencies' effectiveness in improving information sharing
and complying with the Network's requirements.

Section 206 (n) Authorizes $50 million to the Director of OMB
for FY2005; authorizes such sums as are necessary thereafter, to be
allocated in accordance with the system design and implementation plan
required by the Act.

SUBTITLE B--PRIVACY AND CIVIL LIBERTIES

Section 211. Privacy and Civil Liberties Oversight Board

Section 211(a) establishes the Privacy and Civil Liberties Oversight Board within the Executive Office of the President.

Section 211(b) sets out congressional findings that in the war
on terrorism, the Government may need additional powers, and that this
shift in power calls for an enhanced system of checks and balances to
protect civil liberties.

Section 211(c) states that the purposes of the Board are to
analyze and review actions the executive branch takes to protect the
Nation from terrorism, and ensure that liberty concerns are
appropriately considered in the development and implementation of laws,
regulations, and policies related to efforts to protect the Nation
against terrorism.

Section 211(d) establishes the functions of the Board which
include advice and counsel, oversight, and interaction with department
and agency privacy and civil liberties officers. Under the advice and
counsel role, Section 211(d) directs the Board to review proposed
legislation, regulations, and policies, including those related to
information sharing, review the implementation of legislation,
regulations, and policies, and advise the President, departments, and
agencies. In providing advice regarding proposals to retain or enhance
a governmental power, the Board is directed to consider whether the
relevant department or agency has explained that the power actually
materially enhances security; that there is adequate supervision of the
use by the executive branch of the power to ensure protection of
privacy and civil liberties; and that there are adequate guidelines and
oversight to properly confine its use. Under its oversight role, the
Board is directed to continually review the regulations, policies, and
procedures of departments and agencies to ensure privacy and civil
liberties are protected and review the information sharing practices of
departments and agencies. Section 211(d) also requires the Board to
review and assess reports from department and agency privacy and civil
liberties officers, make recommendations to them, and, when
appropriate, coordinate their activities on relevant interagency
matters. It also requires members of the Board to appear and testify
before Congress upon request.

Section 211(e) establishes reporting requirements. It requires
the Board to receive reports from the department and agency privacy and
civil liberties officers, and periodically submit reports of its
activities to the President and the appropriate committees of Congress,
including the Senate Committee on Governmental Affairs, the House
Committee on Government Reform, the Committees on the Judiciary, and
the Committees on Intelligence. This section also requires that the
reports shall be unclassified to the greatest extent possible, with a
classified annex where necessary.

Section 211(f) requires the Board to ensure the public is
informed by making its reports available to the public to the greatest
extent consistent with the protection of classified information, and
holding public hearings, as appropriate.

Section 211(g) authorizes the Board to have access to relevant
records of departments and agencies, to interview personnel of
departments and agencies, to request information or assistance from any
State, tribal, or local government, and to require, by subpoena issued
at the direction of a majority of the Board, persons to produce
relevant information. This section also establishes enforcement
mechanisms for its subpoena authority.

Section 211(h) establishes the membership of the Board, which
shall include a full-time chairman and four additional members, who
would be presidentially-appointed and Senate-confirmed for 6-year fixed
terms. The members of the Board are required to be selected solely on
the basis of their professional qualifications, achievements, public
stature, expertise in civil liberties and privacy, and relevant
experience and members may not be an official, officer, or employee of
the Federal government in another capacity. This section also requires
that no more than three members of the Board be members of the same
political party. This section also establishes procedures for meetings
and quorums.

Section 211(i) establishes the compensation and travel expenses of the Board members.

Section 211(j) establishes procedures for the appointment and
compensation of staff, provides for the use of detailees, and
authorizes the Board to procure consultant services.

Section 211(k) directs the appropriate departments and
agencies to cooperate with the Board to ensure an expeditious process
for appropriate security clearances.

Section 211(l) provides that, for the purposes of the Federal
Advisory Committee Act, the Board shall be treated like an agency, not
an advisory committee.

Section 212. Privacy and Civil Liberties Officers

Section 212(a) requires agency and department heads of Justice,
Defense, State, Treasury, Health and Human Services, Homeland Security,
National Intelligence, and the Central Intelligence Agency and any
other department or agency indicated by the Board to designate not less
than one senior officer to assist the head of the respective department
or agency in appropriately considering privacy and civil liberties
concerns, to periodically investigate and review agency actions,
policies, and procedures, and to ensure that the department or agency
has adequate procedures to receive, investigate, respond to, and
redress complaints from individuals who allege violations of their
privacy or civil liberties. In providing advice regarding proposals to
retain or enhance a governmental power, the privacy and civil liberties
officers are directed to consider whether the relevant department or
agency has explained that the power actually materially enhances
security; that there is adequate supervision of the use by the
executive branch of the power to ensure protection of privacy and civil
liberties; and that there are adequate guidelines and oversight to
properly confine its use.

Section 212(b) provides an exception to (a) where the privacy
or civil liberties officer within a department or agency has already
been statutorily created.

Section 212(c) provides that privacy and civil liberties
officers report directly to the head of the department or agency and
that they coordinate their activities with the appropriate Inspector
General.

Section 212(d) requires the head of each department or agency
to ensure that each privacy and civil liberties officer has the
necessary information, material, and resources to fulfill their
functions, is advised of proposed policy changes, is consulted, and is
provided appropriate access to personnel and material.

Section 212(e) prohibits reprisals against employees for
making a complaint or for disclosing information to a privacy or civil
liberties officer, or to the Privacy and Civil Liberties Oversight
Board, but provides no new personnel rights or causes of action.

Section 212(f) establishes quarterly reporting requirements for the privacy and civil liberties officers on their activities.

Section 212(g) requires that the privacy and civil liberties
officers make their reports available to the public to the greatest
extent consistent with the protection of classified information and
otherwise inform the public of their activities.

Section 212(h) makes clear that the provisions under this
section shall not be construed to limit or supplant other authorities
provided by law to privacy and civil liberties officers.

SUBTITLE C--INDEPENDENCE OF INTELLIGENCE AGENCIES

Section 221. Independence of the National Intelligence Director

This section requires that the NID not be based in the
Executive Office of the President. It also provides that the NID shall
provide the President and Congress with national intelligence that is
timely, objective, independent of political considerations, and which
has not been shaped to serve policy goals.

Section 222. Independence of Intelligence

The Director of the NCTC and director of other national
intelligence centers are required to provide the President, Congress,
and the NID with intelligence that is timely, objective, independent of
political considerations, and which has not been shaped to serve policy
goals. The CIA Director is required to ensure that the intelligence
produced by the CIA is objective, independent of political
considerations, and has not been shaped to serve policy goals. The
National Intelligence council is required to ensure that its
intelligence estimates are timely, objective, independent of political
considerations, and have not been shaped to serve policy goals.

Section 223. Independence of National Counterterrorism Center

No officer or agency of the executive branch can require the
NCTC Director to receive permission to testify before Congress and no
officer or agency of the executive branch can require the NCTC Director
to submit testimony, recommendations, or comments to Congress for
review prior to submission to Congress if the testimony,
recommendations, or comments include a statement indicating they are
the views of the NCTC, and do not necessarily represent the
Administration's views.

Section 224. Access of Congressional Committees to National Intelligence

The NID, the NCTC Director and the Director of any national
intelligence center must provide to the Congressional intelligence
committees and any other committee with jurisdiction over the subject
matter to which the information relates all intelligence assessments,
intelligence estimates, sense of the intelligence community memoranda,
and daily senior executive intelligence briefs, other than the
Presidential Daily Brief and those reports prepared exclusively for the
President.

The NID, NCTC Director and director of other national
intelligence centers are also required to respond within 15 days to
requests for any intelligence assessment, report, estimate, or other
intelligence information from the Congressional intelligence committees
or other committees of Congress with jurisdiction over the subject
matter to which the information relates. The NID, NCTC Director, and
director of other national intelligence centers are also required to
respond to such requests from the Chairman, Vice Chairman, or Ranking
Member of the Senate or House intelligence committees. The NID, NCTC
Director, and director of other national intelligence centers are
required to provide the requested information unless the President
certifies that the information is not being provided because the
President is asserting a privilege pursuant to the United States
Constitution.

Section 225. Communications with Congress

Employees or contractors for the National Intelligence
Authority, CIA, DIA, NGA, NSA, FBI, and other agencies principally
involved in the conduct of foreign intelligence or counterintelligence
are permitted to disclose certain information to Congress without
reporting it first to the appropriate inspector general. The
information they may report is information, including classified
information, the employee reasonably believes provides direct and
specific evidence of a false or inaccurate statement to Congress
contained in, or withheld from Congress any intelligence information
material to, any intelligence assessment, report, or estimate. Such a
disclosure may be made to a member of a committee of Congress having
primary responsibility for oversight of the agency to which the
information relates and who is authorized to receive information of the
type disclosed, other members of Congress authorized to receive
information of the type disclosed, or an employee of Congress with the
appropriate clearance and who is authorized to receive information of
the type disclosed.

TITLE III--MODIFICATIONS OF LAWS RELATING TO INTELLIGENCE COMMUNITY MANAGEMENT

SUBTITLE A--CONFORMING AND OTHER AMENDMENTS

Section 301. Restatement and Modification of Basic Authority on the Central Intelligence Agency

Makes technical and conforming amendments establishing the
Central Intelligence Agency as an independent agency. This section also
creates the position of the Director of the Central Intelligence
Agency, appointed by the President and confirmed by the Senate. The
Director of the CIA reports to the NID regarding his or her activities.

The Director of the CIA shall (1) serve as the head of the
CIA; (2) collect intelligence through human sources and by other
appropriate means, except that the Director of the CIA shall have no
police, subpoena, or law enforcement powers or internal security
functions; (3) correlate and evaluate intelligence related to the
national security and provide appropriate dissemination of such
intelligence; (4) provide overall direction for and coordination of the
collection of national intelligence outside the United States through
human sources by elements of the intelligence community authorized to
undertake such collection and, in coordination with other departments,
agencies, or elements of the United States Government which are
authorized to undertake such collection, ensure that the most effective
use is made of resources and that appropriate account is taken of the
risks to the United States and those involved in such collection; and
(5) perform such other functions and duties pertaining to intelligence
relating to the national security as the President or the NID may
direct.

Notwithstanding the provisions of any other law, the Director
of the CIA may, in the discretion of the Director, terminate the
employment of any officer or employee of the CIA whenever the Director
considers the termination of employment of such officer or employee
necessary or advisable in the interests of the United States.

The Director of the CIA shall, in accordance with standards
developed by the Director in consultation with the NID: (1) enhance the
analytic, human intelligence and other capabilities of the CIA; (2)
develop and maintain an effective language program within the CIA; (3)
emphasize the hiring of personnel of diverse backgrounds for purposes
of improving the capabilities of the CIA; (4) establish and maintain
effective relationships between human intelligence and signals
intelligence within the CIA at the operational level; and (5) achieve a
more effective balance within the CIA with respect to unilateral
operations and liaison operations. The CIA Director shall, not later
than 180 days after the effective date of this section, and annually
thereafter, submit to the NID and the congressional intelligence
committees a report setting forth: (A) a strategy for improving the
conduct of analysis (including strategic analysis) by the CIA, and the
progress in implementing the strategy; (B) a strategy for improving the
human intelligence and other capabilities of the CIA, and the progress
in implementing the strategy; (C) in conjunction with the Director of
the NSA, a strategy for achieving integration between signals and human
intelligence capabilities, and the progress in implementing the
strategy; (D) metrics and milestones for measuring progress in the
implementation of each such strategy.

Section 302. Conforming Amendments Relating to Roles of
National Intelligence Director and Director of the Central Intelligence
Agency

Makes technical and conforming amendments.

Section 303. Other Conforming Amendments

Makes technical and conforming amendments.

Section 304. Modifications of Foreign Intelligence and Counterintelligence Under National Security Act of 1947

Makes technical and conforming amendments.

Section 305. Elements of Intelligence Community Under National Security Act of 1947

Makes technical and conforming amendments.

Section 306. Redesignation of National Foreign Intelligence Program as the National Intelligence Program

Makes technical and conforming amendments.

Section 307. Conforming Amendments on Coordination of
Budgets of Elements of the Intelligence Community within the Department
of Defense

Makes technical and conforming amendments.

Section 308. Repeal of Superseded Authorities

Makes technical and conforming amendments.

Section 309. Clerical Amendments to National Security Act of 1947

Makes technical and conforming amendments.

Section 310. Modification of Authorities Relating to National Counterintelligence Executive

The Office of the National Counterintelligence Executive is
moved to the Office of the NID. This section also makes other technical
amendments.

This section terminates the positions of (1) Deputy Director of
Central Intelligence for Community Management; (2) Assistant Director
of Central Intelligence for Collection; (3) Assistant Director of
Central Intelligence for Analysis and Production; and (4) Assistant
Director of Central Intelligence for Administration.

SUBTITLE C--OTHER TRANSITION MATTERS

Section 331. Executive Schedule Matters

This section sets the pay for the following individuals according to the Executive Schedule:

NID--Level I.

NCTC Director and Deputy NIDs--Level II.

Director of the Central Intelligence Agency--Level III.

Section 332. Preservation of Intelligence Capabilities

This directs the NID, DCI, and the Secretary of Defense to take
appropriate actions to preserve the intelligence capabilities during
the establishment of this act.

Section 333. Reorganization

This section provides the National Intelligence Director the
authority (with the approval of the President and after consultation
with the departments or agencies concerned) to allocate or reallocate
functions among the officers of the NIP and establish, consolidate,
alter, or discontinue organizational units within the NIP. Any use of
this authority would have to be consistent with the law. The NID shall
also provide notice to Congress, including the rationale for the
action, and then have the reorganization plan approved by the
intelligence and government operations committees in both the Senate
and House of Representatives.

Section 334. National Intelligence Director Report on Implementation of Intelligence Community Reform

This section requires the NID to report to Congress on the implementation of this act one year after the date of its enactment.

Section 335. Comptroller General Reports on Implementation of Intelligence Community Reform

This section requires the Comptroller General of the GAO to
issue an implementation progress report two years after the enactment
of the act and issue interim reports as he finds appropriate. These
reports are to provide Congress with (1) an overall assessment of the
progress made in the implementation of this Act (and the amendments
made by this Act), (2) a description of any delays or other short-falls
in the implementation of this Act that have been identified by the GAO,
and (3) recommendations for additional legislative or administrative
action that the Comptroller General considers appropriate.

Section 336. General References

Makes technical and conforming amendments.

SUBTITLE D--EFFECTIVE DATE

Section 341. Effective Date

This Act will take effect 180 days after its enactment, unless
the President provides that one or more provisions of this Act shall
take effect earlier.

VI. ESTIMATED COST OF LEGISLATION

DEAR MADAM CHAIRMAN: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2840, the National
Intelligence Reform Act of 2004.

If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is Raymond J. Hall.

Sincerely,

ELIZABETH ROBINSON

(For Douglas Holtz-Eakin, Director).

Enclosure.

S. 2840--National Intelligence Reform Act of 2004

Summary: S. 2840 would establish the National Intelligence
Authority (NIA) to unify and strengthen intelligence activities of the
U.S. government, including foreign intelligence and counterintelligence
activities. The legislation would transfer some existing organizations,
specifically the Office of the Deputy Director of Central Intelligence
for Community Management and the Terrorist Threat Integration Center,
to the NIA. S. 2840 also would establish a National Counterterrorism
Center and one or more national intelligence centers within the NIA.
Finally, the legislation would direct the President to establish a
`trusted information network' to promote sharing of intelligence and
homeland security information among all relevant federal departments,
state and local authorities, and relevant private-sector entities, and
to establish a national intelligence reserve corps.

CBO estimates that implementing S. 2840 would cost about $700
million over the 2005-2009 period, assuming appropriation of the
necessary amounts. That total does not include the costs associated
with implementing provisions dealing with the national intelligence
reserve corps. CBO cannot predict when a national emergency would
occur, but costs for the proposed reserve corps would likely be
insignificant in most years. Enacting S. 2840 would not affect direct
spending or receipts.

S. 2840 contains intergovernmental and private-sector mandates
as defined in the Unfunded Mandates Reform Act (UMRA), but CBO expects
the cost of complying with those mandates would be small and well below
the thresholds established in that act ($60 million for
intergovernmental mandates and $120 million for private-sector mandates
in 2004, adjusted annually for inflation).

Estimated cost to the Federal Government: The following table
summarizes the estimated net budgetary impact of establishing the
National Intelligence Authority (including the costs of building a new
headquarters facility to house the NIA and administering the
organization) and implementing certain activities authorized by the
bill. The costs of this legislation fall within budget functions 050
(national defense) and 750 (administration of justice).

Basis of estimate: CBO estimates that implementing S. 2840 would
cost about $700 million over the 2005-2009 period, assuming
appropriation of the necessary funds. These costs are in addition to
those that would be incurred by the Office of the Deputy Director of
Central Intelligence for Community Management and the Terrorist Threat
Integration Center under current law. The estimated costs include
expenses to establish, house, and administer the new intelligence
authority, carry out new information-sharing activities in 2005
specifically authorized in the bill, and implement other specified
programs, such as improving intelligence training programs and
establishing a scholarship program. The estimate does not include the
costs

associated with establishing the national intelligence reserve
corps. Any such costs would be insignificant in most years, and CBO has
no basis for predicting when a national emergency would occur.

For purposes of this estimate, CBO assumes that the bill will
be enacted by the end of the calendar year and that necessary funds
will be appropriated for each fiscal year. The estimated costs of
implementing the bill are based on limited information obtained about
the affected organizations and on the staffing levels and
administrative expenses of other federal agencies.

Create the National Intelligence Authority

CBO estimates that establishing, housing, and administering the
new authority would cost about $390 million over the 2005-2009 period.

Costs for New NIA Staff and Interim Office Space. The bill
would transfer the Office of the Deputy Director of Central
Intelligence for Community Management (identified as the Intelligence
Community Management Account within the budget) and the Terrorist
Threat Integration Center (TTIC) to the NIA.

The Intelligence Community Management Account (ICMA) was
established by Congressional direction to provide resources that
directly support the Director of the Central Intelligence Agency (CIA)
and the intelligence community as a whole in coordinating cross-program
activities. Because part of its budget is classified, CBO does not know
the overall size of this organization. Unclassified budgets for the
ICMA indicate that the office has a staff of about 300 people who
develop the National Foreign Intelligence Program budget, oversee
research and development activities, and develop intelligence plans and
requirements, but the Congress also authorizes and appropriates funds
for additional staff in the classified portion of the intelligence
budget.

Similarly, CBO has no budget information on the TTIC, but
public information released by the White House indicates that the
center opened in May 2004 with a staff of about 60 people working
alongside the counterterrorism offices of the Federal Bureau of
Investigation and the CIA. That same information indicates that the
Administration expects to eventually staff the TTIC with between 200
and 300 people to serve as the hub for all intelligence regarding
terrorist threats.

CBO expects that the NIA will require additional staff to
perform its authorized functions above the staff transferred from the
ICMA and the planned staff for the TTIC. Because much of the detailed
information regarding the organization, staffing levels, and budgets of
the intelligence community are classified at a level above clearances
held by CBO employees, CBO has used information about staff
requirements from similar organizations within the Department of
Defense, the Department of Homeland Security, and other federal
agencies to attempt to estimate the number of additional staff that
might be needed by the NIA. Based on that analysis, CBO estimates that
the NIA might need to hire around 300 new staff including appointees
such as principal and deputy directors, key managers such as a general
counsel and an inspector general, personnel to perform administrative
functions such as policy development and budget and finance activities,
and personnel for the National Counterterrorism Center and one or more
national intelligence centers. CBO expects that many of these new hires
would be staff transferred from other organizations within the
intelligence community but that those other organizations would
eventually fill many of the vacated positions within their
organizations over about four years following enactment of this
legislation.

Based on information about the staffing levels and costs for
the administrative offices of the Department of Defense, the Department
of Homeland Security, and other agencies, CBO estimates that the
personnel and related expenses to provide centralized leadership,
coordination, and support and analytical services for the National
Intelligence Authority would eventually cost around $45 million
annually, but that costs would be much lower in the first few years as
positions are filled. CBO estimates that such costs would be minimal in
the first year and total about $130 million over the 2005-2009 period.

Section 121 would prohibit the Office of the National
Intelligence Director from being co-located with any other element of
the intelligence community after October 1, 2006. Until that time, CBO
assumes that the director's office and associated staff would occupy
the space currently used by the Intelligence Community Management
staff. After October 1, 2006, CBO assumes that the office would move to
new office space in a building owned by the General Services
Administration (GSA) until a new building can be built for its use. CBO
estimates that initially GSA would need to renovate and furnish office
space for the NIA staff. (After 2009, CBO expects that these positions
would be relocated to the new permanent NIA headquarters.) CBO
estimates that the GSA rental payments would reach nearly $20 million a
year and total about $40 million over the 2007-2009 period. Additional
costs to purchase computers, network equipment, and supplies in the
first few years following the relocation into the GSA-owned building
also would be significant. CBO estimates that those costs would total
$30 million over the 2007-2009 period.

Design, Construct, and Maintain a New Federal Building. As
mentioned earlier, section 121 would prohibit the Office of the
National Intelligence Director from being co-located with any other
element of the intelligence community after October 1, 2006. Although
the NIA could choose to buy or lease an existing building, CBO assumes
that GSA would construct a new building on land already owned by the
federal government to serve as the headquarters of the NIA because of
the need for a building that meets Level-V security standards and the
mission of the new authority.

Based on information provided by GSA about recent federal
office building projects. CBO estimates that planning and design of the
new headquarters would cost $15 million over the 2005-2006 period, and
that constructing the facility to house NIA employees would cost about
$175 million over the 2006-2009 period. (An additional $20 million in
spending would occur in 2010 to complete construction of the new
building.) CBO assumes that the headquarters would be located on
property already owned by the federal government in the Washington,
D.C., area. If GSA had to buy land for the building site, costs would
be higher. CBO assumes that construction of the new facility would not
start until sometime in late 2006 and would be completed after 2009.
Therefore, CBO estimates that no costs associated with furnishing,
equipping, and maintaining the new space would be incurred during the
2005-2009 period nor would there be costs to relocate NIA staff from
the interim offices to the new headquarters over that period.

Other Program Authorizations

S. 2840 would authorize the President and the NIA to initiate or
enhance several programs within the intelligence community. Based on
information from the Administration and on the costs of other similar
efforts, CBO estimates that those efforts would cost about $35 million
in 2005 and total $305 million over the 2005-2009 period, subject to
appropriation of the necessary amounts.

Information Sharing. Section 206 would direct the President to
establish a `trusted information network' to promote sharing of
intelligence and homeland security information among all relevant
federal departments, state and local authorities, and relevant
private-sector entities. That section also would create an executive
council chaired by the Director of the Office of Management and Budget
to implement and manage the network and create an advisory board to
advise the President and the executive council on policy, technical,
and management issues related to the design and operation of the
network. Finally, the section would authorize the appropriation of $50
million in fiscal year 2005 and such sums as may be necessary for each
subsequent year for this effort. For this estimate, absent an
understanding of the information networks in place today within the
intelligence community, the requirements for establishing such an
information-sharing network, and the timelines needed to do so, CBO has
projected the $50 million authorized for 2005 over the 2006-2009 period
with annual adjustments for anticipated inflation. Thus, CBO estimates
implementing this section would cost about $235 million over the
2005-2009 period. CBO notes that the Department of Defense recently
completed the purchase of equipment for upgrading their intelligence
network to improve the sharing of national security intelligence,
surveillance and reconnaissance, and command and control information
sharing at a cost of nearly $1 billion.

National Intelligence Reserve Corps. Section 116 would allow
the NIA to establish a national intelligence reserve corps consisting
of former employees of the intelligence community who would be eligible
for temporary reemployment during period of national emergency. Under
the bill, the total number of personnel in this reserve corps could not
exceed 200 individuals. Members of the reserve corps would receive
transportation and per diem when participating in any training, and
members who are retired federal employees would be allowed to collect
both pay and retirement benefits during the period of reemployment. CBP
cannot predict when a national emergency might occur. In most years,
CBO expects that the cost associated with reserve corps would be
insignificant--mostly covering a limited training time and per diem and
transportation. Even in an emergency, if all members of the reserve
corps were reemployed for six months, the costs would total only about
$10 million.

Improving Intelligence Capabilities of the Federal Bureau of
Investigation (FBI). Section 204 would direct the Director of the FBI
to continue to improve the intelligence capabilities of the bureau and
to develop and maintain a national intelligence workforce within the
FBI. Today, the FBI spends about $30 million on counterterrorism
training. Since 2002, more than 1,500 agents have been added to the
bureau's staff to meet the counterterrorism mission, an increase of
about 20 percent. In addition, since the events of September 11, 2001,
the FBI has partnered with other intelligence agencies to provide
training in counterterrorism and counterintelligence to its staff, and
it plans to increase that training in the future. Assuming that
implementation of this section would result in more training than
currently planned, CBO estimates that the cost for this additional
training would total $3 million in 2005 and almost $30 million over the
2005-2009 period, a 20 percent increase over current spending levels.

Privacy and Civil Liberties Oversight Board. Section 211 would
establish a Privacy and Civil Liberties Oversight Board within the
Executive Office of the President to advise the President and Executive
Branch on privacy concerns while implementing new legislation. Based on
the budgets of other advisory panels, CBO estimates that the costs to
operate this panel would be about $1 million in 2005 and would total
$10 million over the 2005-2009 period.

Intelligence Community Scholarship Program. Section 152 would
authorize the NIA Director to establish a scholarship program for
individuals designed to recruit and prepare students for civilian
careers in the intelligence community to meet the critical needs of the
intelligence community agencies. Assuming that the NIA would provide
about 300 scholarships each year, CBO estimates that the costs of these
scholarships would average about $6 million a year and total about $30
million over the 2005-2009 period.

Security Clearances. Section 115 would establish uniform
procedures throughout the federal government for granting security
clearances and establish a single agency for conducting all security
clearance investigations. Currently, the Office of Personnel Management
(OPM) conducts the investigations for 60 percent of the clearances
granted by the federal government. By early next year, that figure will
grow to 90 percent when it takes over the investigations for the
Department of Defense. Assuming that the resources for the 20 agencies
for which OPM does not currently conduct investigations are transferred
to OPM, CBO estimates that there would be no change in overall
government spending if this provision is enacted.

Intergovernmental and private-sector impact: This bill would
impose both intergovernmental and private-sector mandates because it
would create two new federal entities with the power to subpoena
information. State, local, and tribal governments, and entities in the
private sector, if subpoenaed by the Inspector General of the National
Intelligence authority or the Privacy and Civil Liberties Oversight
Board, would be required to provide testimony, documents, or other
evidence. CBO expects that the Inspector General and the Oversight
Board would use their subpoena power sparingly and that the costs to
comply with such subpoenas would not be significant. CBO estimates that
the costs to public and private entities would be small and well below
the annual thresholds established in UMRA ($60 million for
intergovernmental mandates and $120 million for private-sector mandates
in 2004, adjusted annually for inflation).

The remaining provisions of the bill contain no mandates as
defined in UMRA and would impose no costs on state, local, or tribal
governments, or entities in the private sector.

VII. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee has considered the
regulatory impact of this bill. The enactment of this legislation will
result in intergovernmental and private-sector mandates as defined in
the Unfunded Mandates Reform Act (UMRA), but the Congressional Budget
Office expects the cost of complying with those mandates would be small
and well below the thresholds established in that act ($60 million for
intergovernmental mandates and $120 million for private-sector mandates
in 2004, adjusted annually for inflation.)

VIII. ADDITIONAL VIEWS

-

ADDITIONAL VIEWS OF SENATORS SPECTER AND SHELBY

We believe that the National Intelligence Reform Act of 2004 (S.
2840 favorably reported from the Government Affairs Committee, includes
several important provisions, particularly the creation of a National
Intelligence Director (NID) with strong budget authority. The budget
authority contained in S. 2840, if retained following Senate floor
action and conference committee, would place the newly-created NID in a
stronger posture vis-a.AE2-vis the intelligence community entities than
exists under current law and practice.

However, S. 2840 does not give the NID additional authorities
that will be required to provide the unity of leadership and
accountability necessary for meaningful intelligence reform. In
particular, we believe strongly that the NID must have day-to-day
operational control of all elements of the Intelligence Community
performing national missions (including the Central Intelligence
Agency, National Reconnaissance Office, National Security Agency, and
National Geospatial-Intelligence Agency).

We believe that clear lines of authority between the NID and
our national intelligence agencies, extending beyond budgetary control,
are critical to our success in countering 21st century national
security threats. To fulfill the historic intent of the National
Security Act of 1947, the Congress must provide the NID--as head of the
intelligence community--the additional authorities necessary to match
the position's responsibilities and to ensure accountability. This
additional authority and responsibility will eliminate any uncertainty
that the NID is in charge and is accountable.

As such, even if S. 2840 were to be presented to the President
in its current form, its failure to provide for NID day-to-day
supervision, direction and control over the major national intelligence
entities represents a significant inadequacy and would provide
insufficient authority to address the escalating cycle of intelligence
failures that our intelligence community has suffered over the past
decade. Alternatively, if the budgetary authority currently contained
in S. 2840 is weakened prior to presentment, we fear that the NID will
be left with meaningless control over the intelligence community and
the country will be far less secure as a result.
Arlen Spector.
Richard Shelby.

ADDITIONAL VIEWS OF SENATOR LEVIN

Today, the greatest threats facing our national security come from
terrorists. We are less likely to be attacked by nations and armies
with tanks and missiles, and more likely to be attacked by terrorists
with bombs hidden in trucks or strapped to their bodies. Since
terrorists are not deterred by the threat of their own destruction, and
because terrorist networks are so diffuse, accurate intelligence is
absolutely essential to preventing attacks.

The release of the 9/11 Commission Report has fueled a debate
about how our intelligence community should be reformed to better
respond to this threat. This is a debate we need to have and the
country is indebted to the 9/11 Commission for its work in setting us
on the course toward reform. Chairman Collins and Ranking Member
Lieberman also deserve tremendous credit for their tireless work in
leading this undertaking at the Governmental Affairs Committee. They
have approached Intelligence Community reform with the seriousness and
sense of urgency the subject demands. The Committee reported bill
reflects their commendable efforts. The Senate Select Committee on
Intelligence (SSCI) and the Senate Armed Services Committee have also
held a number of hearings on intelligence failures and have built a
strong record for reform.

The Governmental Affairs Committee bill is based, in
significant ways on the recommendations of the 9/11 Commission. We need
to consider carefully the recommendations of the 9/11 Commission and
take action to correct the deficiencies they identified which impaired
our ability to detect and act against those terrorists. At the same
time, we should be mindful that these issues are complex. We should
take the time necessary to understand all of the issues and develop
reforms.

THE NEED FOR INDEPENDENT AND OBJECTIVE INTELLIGENCE

The Commission's report provided us many useful recommendations for
improving the structure of our intelligence agencies. But, in taking on
structural reform, we must not lose sight of the fundamental problem
that was demonstrated not by the pre-9/11 intelligence failures but by
the pre-Iraq War intelligence failures.

The massive intelligence failures before the Iraq War were of a
totally different kind from the 9/11 failures. As described in the
bipartisan 500-page SSCI report, to a significant degree, the failures
were the result of the CIA shaping and manipulating intelligence. The
CIA interpreted and communicated intelligence information in manner
intended to, in my opinion, and for no other discernible purpose than
to, tell the administration what it thought the administration wanted
to hear about Iraq possessing weapons of mass destruction and, at one
crucial moment, about Iraq having a close relationship with al-Qaeda.
The scope and seriousness of this problem of manipulated intelligence
to serve policy goals cannot be overstated. At the same time, there is
no evidence that a lack of DCI authority over intelligence budgets or
personnel contributed to those failures.

The problem of manipulated and politicized intelligence is not
new. Forty years ago, Secretary of Defense McNamara invoked classified
communications intercepts to support passage of the Gulf of Tonkin
Resolution, which was used by President Johnson as the legislative
foundation for expanding the war against Vietnam.

According to John Prados, an analyst at the National Security
Archive, Secretary McNamara used the intercepts as a `trump card during
the 1964 hearings to silence doubters.' According to Prados, McNamara
told Congress that `intelligence reports from a highly classified and
unimpeachable source reported that North Vietnam was making preparation
to attack our destroyers,' and later that `the attack was underway,'
and finally that `the North Vietnamese lost two ships in the
engagement.'

The intercepts later proved dubious, but President Johnson had
already made the decision to escalate the conflict. Intelligence was
misused to support the Gulf of Tonkin Resolution, and in turn, to
support the President's decision.

Director of Centeral Intelligence William Casey heavily
manipulated intelligence during the Iran-Contra period. The bipartisan
Iran Contra Report set forth the evidence that Director Casey
`misrepresented or selectively used available intelligence to support
the policy he was promoting.'

History repeated itself with the pre-war Iraq intelligence.
Before the war, top administration officials asserted that Saddam
Hussein had weapons of mass destruction and had links to the al Qaeda
terrorists who had attacked us on 911. For instance, in December 2001
Vice President Cheney said:

* * * it's been pretty well confirmed that [9/11 al-Qaeda
hijacker Mohammad Atta] did go to Prague and he did meet with a senior
official of the Iraqi intelligence service in Czecholslovakia last
April, several months before the attack- (Vice President Cheney, Meet
the Press, December 9, 2001)

The President himself said in March of 2002: `[Saddam Hussein]
possesses the world's most dangerous weapons.' (President Bush, Press
Conference, March 22, 2002)

The Vice President in August of 2002 stated the following:

But we know that Saddam has resumed his efforts to acquire
nuclear weapons. Many of us are convinced that Saddam will acquire
nuclear weapons fairly soon- (Vice President Cheney, Speech to the
VFW's 103rd National Convention, August 26, 2002)

National Security Advisor Rice said the following on September 8, 2002:

We do know that there have been shipments going * * * into
Iraq, for instance, of aluminum tubes that really are only suited
to--high-quality aluminum tools that are only really suited for nuclear
weapons programs, centrifuge programs- (National Security Advisor Rice,
Late Edition, September 8, 2002)

A few weeks later, Secretary of Defense Rumsfeld said that:

Very likely all they need to complete a weapon is fissile
materials--and they are, at this moment, seeking that material--both
from foreign sources and the capability to produce it indigenously-
(Secretary Rumsfeld, Testimony Before the Senate Armed Services
Committee, September 19, 2002)

On September 19th, the President again said that Iraq has WMD
(President Bush, Remarks at OHS Complex, September 19, 2002), and
before the Senate Armed Services Committee on the same day, Secretary
Rumsfeld said that Saddam Hussein `has, at this moment, stockpiles of
chemical and biological weapons, and is pursuing nuclear weapons.'

A week later President Bush made the unqualified link between
al-Qaeda and Saddam Hussein when he said `you can't distinguish between
al-Qaeda and Saddam when you talk about the war on terror.' (President
Bush, Photo Opportunity, September 25, 2002)

These leadership statements leading up to and including
September 2002, were unqualified, unconditional and certain. The
qualificiations and more cautious words in Intelligence Community
reports, estimates and findings on these subjects were ignored by the
Administration. The Intelligence Community began to manipulate and
shape the intelligence to reflect and support the certainty of the
administration's public statements.

In July 2004, the Senate Select Committee on Intelligence
issued a 500-page unanimous report setting out dozens of instances
where the CIA or its leaders made statements about Iraq's WMD and, to a
lesser extent, links to al-Qaeda which were significantly more certain
than the underlying intelligence reporting and than their earlier
findings.

The key finding and the first overall conclusion of the SSCI
report is that `Most of the major key judgments in the Intelligence
Community's October 2002 National Intelligence Estimate (NIE), Iraq's
Continuing Programs for Weapons of Mass

Destruction, either overstated or were not supported by, the underlying intelligence reporting.'

And relative to the alleged relationship between Saddam Hussein
and al-Qaeda, the following event is illustrative of the CIA shaping
intelligence in that area too. President Bush said on September 28,
2002, that `each passing day could be the one on which the Iraqi regime
gives anthrax or VX nerve gas or someday a nuclear weapon to a
terrorist group,' On October 7, DCI Tenet sent a letter declassifying
CIA intelligence which indicated Iraq was unlikely to provide WMD to
terrorists or al Qaeda, and called such a move an `extreme step,' a
very different perspective from that of the President. But the very
next day, Tenet told the New York Times that there was `no
inconsistency' between the views in the letter and the President's
views on the subject. His statement was flatly incorrect, but his
effort to minimize the inconsistency was an attempt to support the
Administration.

There are many other examples. On February 11, 2003, DCI Tenet
publicly stated, as though it were fact, that Iraq `has provided
training in poisons and gases to two al-Qaida associates.' However, in
his then-classified testimony from September 17, 2002, which was
consistent with the underlying intelligence, Director Tenet had said
that the information on training was `from sources of varying
reliability.' The underlying intelligence also acknowledged that the
information was `at times contradictory.' As the Intelligence Committee
report makes clear, Tenet's public testimony could lead people to
believe incorrectly `that the CIA believed the training had definitely
occurred.'

At a hearing in February of this year, I asked Director Tenet
about the alleged meeting between 9/11 hijacker Mohammed Atta and an
Iraqi intelligence officer in Prague in April 2001. He told me that the
CIA had `not gathered enough evidence to conclude that it happened' and
that `I don't know that it took place. I can't say that it did.' What
he neglected to say was that the CIA did not believe the meeting had
happened, a fact he finally acknowledged publicly in July, when he
wrote that the CIA was `increasingly skeptical that such a meeting
occurred,' and that there was an `absence of any credible information
that the April 2001 meeting occurred.' The SSCI report notes that the
`CIA judged that other evidence [besides the one Czech report]
indicated that these meetings likely never occurred.'

In all of these cases, and many others, where public statements
of the CIA varied from the classified intelligence in the lead-up to
the war, the Iraqi threat became clearer and more dire and the presence
of WMD more certain. In public statements and reports, the CIA had
become effectively a political arm of the White House.

According to Bob Woodward's book, Plan of Attack, after the
Intelligence Community's case regarding Iraqi WMD was presented to the
President in the Oval Office on December 21st, 2002:

Bush turned to Tenet. `I've been told all this intelligence about having WMD and this is the best we've got?'

From the end of one of the couches in the Oval Office, Tenet
rose up, threw his arms in the air. `It's a slam-dunk case!' the
director of central intelligence said.

Bush pressed. `George, how confident are you?'

Tenet, a basketball fan who attended as many home games of his
alma mater Georgetown University as possible, leaned forward and threw
his arms up again. `Don't worry, it's a slam dunk!'

As we know now--and as Director Tenet should have known then--the case was anything but a slam dunk.

Many experts, including many of the witnesses that have appeared
before the Governmental Affairs Committee, the Senate Select Committee
on Intelligence and the Senate Armed Services Committee during hearings
on Intelligence Community reform, have commented on the importance of
promoting the independence of our intelligence agencies and the
objectivity of intelligence analysis by insulating it from political
pressure.

In his memoir Turmoil and Triumph, Former Secretary of State George Shultz said:

The CIA should have nothing to do with policy. You have to keep objectivity in analyses and;

The DCI should not be part of the policy process; heavy
involvement can't help but influence you. In the policy business you
develop a bias. The CIA should be objective, and if it is not, that
means what you say must be discounted.

The Iran Contra Committee concluded that: `The gathering,
analysis, and reporting of intelligence should be done in such a way
that there can be no question that the conclusions are driven by the
actual facts, rather than by what a policy advocate hopes these facts
will be.'

Judge William Webster, former head of the CIA, said the
following before the Senate Governmental Affairs Committee on August
16, 2004:

With respect to relations with the president, while the leader
of the intelligence community must be the principal advisor on
intelligence to the president, he must work hard--very hard--to avoid
either the reality or the perception that intelligence is being
framed--read `spun'--to support a foreign policy of the administration.
* * * The head of the intelligence community does not need to be
located in the White House, and to avoid these problems I believe he
should not be.

In an August 18, 2004 Senate Select Committee on Intelligence
hearing on Intelligence Community reform, Former chief weapons
inspector David Kay put it this way:

Intelligence must serve the nation and speak truth to power
even if in some cases elected leaders chose, as is their right, to
disagree with the intelligence with which they are presented. This
means that intelligence should not be part of the political apparatus
or process.

That is, I think, if you move forward on NID legislation, is
going to be the hardest thing to communicate, that the NID must serve
the nation and the national security objectives of the nation and he
serves, whoever is the president, best by giving him the unvarnished
truth, which will often not be welcomed.

At that same hearing, Retired General Charles Boyd told the
Committee of the enormous pressure that political appointees are under
`to give the president what he wants rather than what he doesn't want,
but needs.' Rather than seeking a special and close relationship to the
president, Boyd suggests that the standard for an intelligence director
`ought to be his distance from the president, his independence of the
president, his professionalism, and be respected as such.'

And on September 21, 2004, eleven former government officials
convened by the Center for Strategic and International Studies (CSIS),
issued nine `Guiding Principles for Intelligence Reform.' The CSIS
group included six former Senators; two former secretaries of Defense
and one Deputy Secretary of Defense; a former Director of Central
Intelligence; and two former secretaries of State (one of whom was also
the National Security Advisor). In words of the CSIS 11: `When
intelligence and policy are too closely tied, the demands of
policymakers can distort intelligence and intelligence analysts can
hijack the policy development process. It is crucial to ensuring this
separation that the Intelligence Community leader have no policy role.
* * * A single individual with the last word on intelligence and a say
in policy as well could be a dangerously powerful actor in the national
security arena--using intelligence to advocate for particular policy
positions, budget requests, or weapons systems that others lacked the
knowledge to challenge.'

I share these concerns about the independence of our
intelligence professional and the objectivity of intelligence
information and I was pleased that, during consideration of
intelligence reform legislation, the Governmental Affairs Committee
adopted an amendment I offered to help assure that the New National
Intelligence Director will be independent and produce objective
intelligence.

The amendment creates a new title, the purpose of which is to
promote the independence of the National Intelligence Director (NID)
and the objectivity of intelligence. The amendment states explicitly
that the NID is outside the Executive Office of the President and away
from the politics and policy debates of that office. This is a
provision that was supported by several witnesses who apeared before
the GAC including former DCI's Judge William Webster and Robert Gates.

The title also requires that the NID, the National
Counterterroism Center (NCTC), the National Intelligence Council, the
Central Intelligence Agency, and other any intelligence center created
by the NID, provide the President and Congress with intelligence
information that is timely, objective, independent of political
considerations and not shaped to serve policy goals.

The title promotes the independence of the NCTC by stating that
the Director cannot be forced to ask for permission to testify before
Congress or to seek prior approval of Congressional testimony or
comments. This is based on authority that exists for other executive
branch agencies, including the Securities and Exchange Commission, the
Office of the Comptroller of the Currency, and the Federal Reserve,
among others. This provision will help ensure Congress has access to
the unvarnished truth.

There are times when members of Congress, even members of the
intelligence Committees, are not provided timely access, or any access
at all, to the intelligence information they need. The title seeks to
remedy that by requiring that Congress have access to intelligence
reports, assessments and estimates. It specifies that some of these
documents must come to the Intelligence Committees as a matter of
course and that those that do not automatically come to the Committee
must be made available upon request of the Chairman or Vice Chairman,
with the exception of information for which the President asserts a
Constitutionally based privilege.

The first overall conclusion of the SSCI report is that `Most
of the major key judgments in the Intelligence Community's October 2002
National Intelligence Estimate (NIE), Iraq's Continuing Programs for
Weapons of Mass Destruction, either overstated or were not supported
by, the underlying intelligence reporting.' The title explicitly
permits Intelligence Community employees to come directly to Congress
with information, even if it is classified information, that provides
direct and specific evidence of a false statement to Congress or a
withholding of information from Congress in any intelligence
assessment, report or estimate.

In my additional views to the SSCI report on intelligence
failures in Iraq, I noted that the CIA Ombudsmen said that he felt the
`hammering' by the Administration on Iraq intelligence was harder than
he had previously witnessed in his 32-year career with the agency. My
amendment addreses such situations by adding a provision to the bill,
permitting the National Intelligence Authority Ombudsman to refer
serious cases of misconduct related to politicized intelligence and
biased reporting to the National Intelligence Authority Inspector
General for investigation.

One important proposal that could not be included in my
amendment but that I am pleased Chairman Collins and Ranking Member
Lieberman support was a change in the rules that govern the Senate
Select Committee on Intelligence. The proposal is based on the
experience of the Governmental Affairs Committee's Permanent
Subcommittee on Investigations (PSI) where the Subcommittee Chairman
and Ranking Member have unique authorities to initiate inquiries and
conduct investigations. The PSI has a long tradition of conducting
successful bipartisan investigations and the authorities vested in the
Chairman and Ranking Member have a lot to do with this track record.
Providng similar authorities to the Chairman and Vice-Chairman of the
Senate Select Committee on Intelligence improve oversight of the
intelligence community. Enhanced Congressional oversight was a primary
recommendation of the 9/11 Commission.

The bottom line is that terrorism is our number one threat and
intelligence is our most essential tool to deal with that threat.
Before we simply create a stronger National Intelligence Director we
must take steps to ensure that the person serving in that position,
indeed our entire Intelligence Community, are better equipped to
provide objective, independent intelligence analyses. A National
Intelligence Director must not be a more powerful `yes man' for the
Administration in power. Our security depends on objective,
independently arrived at intelligence.

MILITARY PERSONNEL TRANSFER AUTHORITY

I have a number of reservations about some provisions of the GAC
bill because they could potentially make us less secure by needlessly
confounding our military capability to fight the war on terror or any
other war.

For example, the bill would grant authority for the NID to move
military personnel within the agencies and activities that fall within
the NID's jurisdiction, the National Intelligence Program (NIP).

However, while the bill places all of the activities, including
budget execution activities, of the National Security Agency (NSA), the
National Reconnaissance Office (NRO), and the National
Geospatial-Intelligence Agency (NGA)--combat support agencies of the
Department of Defense--within the NIP and under the NID's jurisdiction,
the day-to-day operations of these agencies are left within the
Department of Defense. These agencies, as well as the Defense
Intelligence Agency and the military departments, employ thousands of
military personnel who provide direct daily support to the military for
operations, in places such as the Joint Staff in the Pentagon and the
combatant commands that are responsible for directing combat and
counterterrorist operations in the field.

Providing personnel transfer authority to the NID in these
circumstances could inadvertently result in the transfer of military
personnel who are providing critical support to military (including
counterterrorist) operations, and thus in the loss of critical support
to those operations. Unilateral personnel moves by the NID could
potentially hamper our military forces' ability to fighter terrorism on
the front lines overseas. It is not enough to require consultation, as
the bill provides, the National Intelligence Director should be
required to obtain the concurrence of the heads of departments and
agencies from which personnel might be transferred.

Furthermore, military personnel have their own unique career
path procedures and requirements. It is possible that if a member of
the military is transferred out of their assigned agency and into a
different assignment, it could detract from their career path options.
So we must be careful not to establish a personnel transfer authority
that would inadvertently either diminish the ability of our armed
forces to fight terrorists, or to impede military personnel in their
normal career paths.

There is language in this bill that would assign the responsibility
to the NID to `establish the requirements and priorities to govern the
collection, analysis and dissemination of national intelligence,' and
to `establish collection and analysis requirements for the intelligence
community, determine collection and analysis priorities, manage
collection and analysis tasking * * *' This language poses several
potential problems in terms of independence and objectivity of
intelligence.

First, with respect to tasking collection of intelligence, the
9/11 Commission Report notes that the NID should support the consumers
of intelligence (the customers), such as the President and the
Secretaries of Defense, State, Homeland Security and the Attorney
General. The `customers' should set requirements, not the `provider'
(the NID). If the NID `establishes requirements' for collection of
intelligence, that suggests that the members of the Intelligence
Community would not be able to establish their own collection
requirements, based on their assigned tasks and missions, and with the
NID serving as the arbiter of which collection priorities will be met
where there are inadequate resources. That is how collection tasking is
now managed on an interagency basis, with a senior Director of Central
Intelligence representative chairing the collection tasking meetings.
It is a system that appears to work well.

Second, with respect to establishing the requirements and
priorities for analysis, and managing the tasking of analysis, this may
have an inadvertent and undesirable outcome. Vesting in the NID the
authority to manage analysis tasking would give the NID the power to
stifle components of the intelligence community from providing
alternative analysis when that analysis doesn't conform to the accepted
view. The NID could assign a multitude of analytic tasks, give them
high priority and effectively preclude an intelligence component from
conducting competitive analysis that it believes is important and which
provides alternative views, such as the Department of Energy
intelligence offices analyzing the intended use of aluminum tubes that
Iraq was trying to acquire; or the National Air and Space Intelligence
Center analyzing the Iraqi

Unmanned Aerial Vehicle program; or the State Department's
Bureau of Intelligence and Research analyzing claims that Iraq was
trying to obtain uranium from Africa. This authority, as stated, could
lead to more `group think' and have a chilling effect on competitive
analysis which all agree is so critical to objective intelligence.

The group of former government officials convened by CSIS made
a number of relevant comments in this regard: `The best analysis
emerges from a competitive environment where different perspectives are
welcomed and alternative hypotheses are encouraged. Intelligence reform
must institutionalize these traits in the analytical process. To
preserve their independence, analysts must be insulated from policy and
political pressure.' They also, most perceptively observed that:
`Intelligence Community reform must not rob Cabinet secretaries of
their own ability to assess intelligence by centralizing the bulk of
assessment resources; the secretaries must be able to turn to their own
analysts for independent perspective and be able to task the
Intelligence Community leader for input to the policymaking process.'

DEFINITION OF THE NATIONAL INTELLIGENCE PROGRAM

There is no perfectly clear line between `national' intelligence and
intelligence that supports joint military operations or otherwise
supports military requirements. Some `national' systems provide
essential support to the military, and some military systems provide
intelligence for national needs. The military is the largest consumer
and producer of intelligence, and it has needs for intelligence on a
24-hour basis to support military operations around the world. The
challenge in reforming the Intelligence Community is to ensure that the
needs of national customers and military customers are both met
adequately. This bill consolidates the bulk of the intelligence assets
under the National Intelligence Director in a way that may make it
difficult to ensure adequate intelligence support to the military. As
the CSIS 11 stated, `Any successful intelligence reform must respect
the military's need to maintain a robust organic tactical intelligence
capability and to have rapid access to national intelligence assets and
information.'

The bill reported by the Committee contains a definition of the
National Intelligence Program (NIP) that may not meet this test, and
thus may have harmful unintended consequences. The underlying draft
bill said that any program, project or activity of the military
departments (namely, the Army, Navy, Air Force and Marines) to acquire
intelligence `solely' for the planning and conduct of `tactical'
military operations were not part of the NIP.

That definition was too narrow because it did not include any
activities of the Defense Intelligence Agency (since it is not a
military department), and because numerous military intelligence
activities--like those of the Joint Military Intelligence Program--are
not `solely' for `tactical' military operations. By excluding such
activities from the definition, they would have been included in the
National Intelligence Program, even though they might support military
operations 90 percent of the time.

That language was changed in committee to broaden the
definition of what is not included in the NIP, so that more elements of
the Joint Military Intelligence Program that are run by either the
military departments or the Defense Intelligence Agency, are not
included within the National Intelligence Program. By adopting this
change, the Committee took an important step in the right direction.

However, I am concerned that, by continuing to include those
Defense Intelligence Agency programs which happen to be funded through
the National Foreign Intelligence Program, the bill still may go too
far in providing the NID control over intelligence programs and
activities that support primarily military operations, and placing them
outside the effective control of the military and the Defense
Department.

I intend to work with the Senate to address these and other concerns when the Senate considers this legislation.

We all share a common objective: to improve our intelligence
system so that it enhances our national security. While we want to
establish a strong manager of the Intelligence Community, we should not
do so at the expense of needed intelligence support to the military
forces that are fighting the war against terrorists both overseas and
here at home.

CARL LEVIN.

IX. CHANGES TO EXISTING LAW

Pursuant to the requirements of paragraph 12 of rule XXVI paragraph
12 of the Standing Rules of the Senate, the following provides a print
of the statutes, or the part or section thereof, to be amended or
replaced (existing law proposed to be omitted is indicated by brackets,
new material is printed in italic, and existing law in which no change
is proposed is shown in roman):

TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES

PART III--EMPLOYEES

Subpart D--Pay and Allowances

CHAPTER 53--PAY RATES AND SYSTEMS

SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

Sec. 5312. Positions at level I

Level I of the Executive Schedule applies to the following positions
for which the annual rate of basic pay shall be the rate determined
with respect to such level under chapter 11 of title 2 [2 USCS Sec. 351
et seq.], as adjusted by section 5318 of this title:

Secretary of State.

Secretary of the Treasury.

Secretary of Defense.

Attorney General.

Secretary of the Interior.

Secretary of Agriculture.

Secretary of Commerce.

Secretary of Labor.

Secretary of Health and Human Services.

Secretary of Housing and Urban Development.

Secretary of Transportation.

United States Trade Representative.

Secretary of Energy.

[Struck out->][ (15) ][<-Struck out] Secretary of Education.

Secretary of Veterans Affairs.

Secretary of Homeland Security.

Director of the Office of Management and Budget.

Commissioner of Social Security, Social Security Administration.

Director of National Drug Control Policy.

Chairman, Board of Governors of the Federal Reserve System.

National Intelligence Director.

Sec. 5313. Positions at level II

Level II of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the rate
determined with respect to such level under chapter 11 of title 2 [2
USCS Sec. 351 et seq.], as adjusted by section 5318 of this title:

[Struck out->][ Director of Central Intelligence. ][<-Struck out]

Deputy National Intelligence Directors (5).

Director of the National Counterterrorism Center.

Sec. 5314. Positions at level III

Level III of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the rate
determined with respect to such level under chapter 11 of title 2:

Sec. 5315. Positions at level IV

Level IV of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the rate
determined with respect to such level under chapter 11 of title 2 [2
USCS Sec. 351 et seq.], as adjusted by section 5318 of this title:

Subpart F--Labor-Management and Employee Relations

CHAPTER 73--SUITABILITY, SECURITY, AND CONDUCT

SUBCHAPTER III--POLITICAL ACTIVITIES

Sec. 7323. Political activity authorized; prohibitions

* * * * * * *

(b)(1) An employee of the Federal Election Commission (except
one appointed by the President, by and with the advice and consent of
the Senate), may not request or receive from, or give to, an employee,
a Member of Congress, or an officer of a uniformed service a political
contribution.

(2)(A) No employee described under subparagraph (B) (except one
appointed by the President, by and with the advice and consent of the
Senate), may take an active part in political management or political
campaigns.

(B) The provisions of subparagraph (A) shall apply to--

(i) an employee of--

(I) the Federal Election Commission or the Election Assistance Commission;

(II) the Federal Bureau of Investigation;

(III) the Secret Service;

(IV) the Central Intelligence Agency;

(V) the National Security Council;

(VI) the National Security Agency;

(VII) the Defense Intelligence Agency;

(VIII) the Merit Systems Protection Board;

(IX) the Office of Special Counsel;

(X) the Office of Criminal Investigation of the Internal Revenue Service;

(XI) the Office of Investigative Programs of the United States Customs Service;

(XII) the Office of Law Enforcement of the Bureau of Alcohol, Tobacco, and Firearms; [Struck out->][ or ][<-Struck out]

(XIII) the National Imagery and Mapping Agency [Struck out->][ National Geospatial-Intelligence Agency ][<-Struck out] ; or

(XIV) the National Intelligence Authority; or

(ii) a person employed in a position described under section 3132(a)(4), 5372, 5372a, or 5372b of title 5, United States Code.

* * * * * * *

SUBCHAPTER IV--FOREIGN GIFTS AND DECORATIONS

Sec. 7342. Receipt and disposition of foreign gifts and decorations

* * * * * * *

(f)(1) Not later than January 31 of each year, each employing
agency or its delegate shall compile a listing of all statements filed
during the preceding year by the employees of that agency pursuant to
subsection (c)(3) and shall transmit such listing to the Secretary of
State who shall publish a comprehensive listing of all such statements
in the Federal Register.

(2) Such listings shall include for each tangible gift reported--

(A) the name and position of the employee;

(B) a brief description of the gift and the circumstances justifying acceptance;

(C) the identity, if known, of the foreign government and the name and position of the individual who presented the gift;

(D) the date of acceptance of the gift;

(E) the estimated value in the United States of the gift at the time of acceptance; and

(F) disposition or current location of the gift.

(3) Such listings shall include for each gift of travel or travel expenses--

(A) the name and position of the employee;

(B) a brief description of the gift and the circumstances justifying acceptance; and

(C) the identity, if known, of the foreign government and the name and position of the individual who presented the gift.

(4)(A) In transmitting such listings for the Central Intelligence Agency, the [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency
may delete the information described in subparagraphs (A) and (C) of
paragraphs (2) and (3) if the Director certifies in writing to the
Secretary of State that the publication of such information could
adversely affect United States intelligence sources.

(B) In transmitting such listings for the National
Intelligence Authority, the National Intelligence Director may delete
the information described in subparagraphs (A) and (C) of paragraphs
(2) and (3) if the Director certifies in writing to the Secretary of
State that the publication of such information could adversely affect
United States intelligence sources.

* * * * * * *

TITLE 5--APPENDIX

INSPECTOR GENERAL ACT OF 1978

Sec. 8H. Additional provisions with respect to Inspectors General of the intelligence community

(a)(1)(A) An employee of the Defense Intelligence Agency, the National Imagery and Mapping Agency [Struck out->][ National Geospatial-Intelligence Agency ][<-Struck
out] , the National Reconnaissance Office, or the National Security
Agency, or of a contractor of any of those Agencies, who intends to
report to Congress a complaint or information with respect to an urgent
concern may report the complaint or information to the Inspector
General of the Department of Defense (or designee).

(B) An employee of the Federal Bureau of Investigation, or of a
contractor of the Bureau, who intends to report to Congress a complaint
or information with respect to an urgent concern may report the
complaint or information to the Inspector General of the Department of
Justice (or designee).

(C) Any other employee of, or contractor to, an executive
agency, or element or unit thereof, determined by the President under
section 2302(a)(2)(C)(ii) of title 5, United States Code, to have as
its principal function the conduct of foreign intelligence or
counterintelligence activities, who intends to report to Congress a
complaint or information with respect to an urgent concern may report
the complaint or information to the appropriate Inspector General (or
designee) under this Act [5 USCS Appx. Sec. 1 et seq.] or section 17 of
the Central Intelligence Agency Act of 1949 [50 USCS 403q].

(D) An employee of the National Intelligence Authority, an
employee of an entity other than the Authority who is assigned or
detailed to the Authority, or of a contractor of the Authority, who
intends to report to Congress a complaint or information to the
Inspector General of the National Intelligence Authority in accordance
with section 141(h)(5) of the National Intelligence Reform Act of 2004.

* * * * * * *

ETHICS IN GOVERNMENT ACT OF 1978

TITLE I--FINANCIAL DISCLOSURE REQUIREMENTS OF FEDERAL PERSONNEL

Sec. 105. Custody of and public access to reports

(a) Each agency, each supervising ethics office in the executive or
judicial branch, the Clerk of the House of Representatives, and the
Secretary of the Senate shall make available to the public, in
accordance with subsection (b), each report filed under this title [5
USCS Appx. Sec. 101 et seq.] with such agency or office or with the
Clerk or the Secretary of the Senate, except that--

(1) this section does not require public availability of a report filed by any individual in the National Intelligence Authority, the Central Intelligence Agency, the Defense Intelligence Agency, the National Imagery and Mapping Agency [Struck out->][ National Geospatial-Intelligence Agency ][<-Struck
out] , or the National Security Agency, or any individual engaged in
intelligence activities in any agency of the United States, if the
President finds or has found that, due to the nature of the office or
position occupied by such individual, public disclosure of such report
would, be [Struck out->][ by ][<-Struck
out] revealing the identity of the individual or other sensitive
information, compromise the national interest of the United States; and
such individuals may be authorized, notwithstanding section 104(a) [5
USCS Appx. Sec. 104(a)], to file such additional reports as are
necessary to protect their identity from public disclosure if the
President first finds or has found that such filing is necessary in the
national interest; and

* * * * * * *

TITLE 6--DOMESTIC SECURITY

CHAPTER 1--HOMELAND SECURITY ORGANIZATION

[Struck out->][ NATIONAL HOMELAND SECURITY COUNCIL ][<-Struck out]

[Struck out->][ There is established
within the Executive Office of the President a council to be known as
the `Homeland Security Council' (in this title [6 USCS Sec. 491 et
seq.] referred to as the `Council'). ][<-Struck out]

[Struck out->][ Sec. 492. Function ][<-Struck out]

[Struck out->][ The function of the Council shall be to advise the President on homeland security matters. ][<-Struck out]

[Struck out->][ Sec. 493. Membership ][<-Struck out]

[Struck out->][ The members of the Council shall be the following: ][<-Struck out]

[Struck out->][ For the purpose of more
effectively coordinating the policies and functions of the United
States Government relating to homeland security, the Council shall-- ][<-Struck out]

[Struck out->][ (1)
assess the objectives, commitments, and risks of the United States in
the interest of homeland security and to make resulting recommendations
to the President; ][<-Struck out]

[Struck out->][ (2) oversee
and review homeland security policies of the Federal Government and to
make resulting recommendations to the President; and ][<-Struck out]

[Struck out->][ (3) perform such other functions as the President may direct. ][<-Struck out]

[Struck out->][ Sec. 495. Staff composition ][<-Struck out]

[Struck out->][ The Council shall have a
staff, the head of which shall be a civilian Executive Secretary, who
shall be appointed by the President. The President is authorized to fix
the pay of the Executive Secretary at a rate not to exceed the rate of
pay payable to the Executive Secretary of the National Security
Council. ][<-Struck out]

[Struck out->][ Sec. 496. Relation to the National Security Council ][<-Struck out]

[Struck out->][ The President may convene
joint meetings of the Homeland Security Council and the National
Security Council with participation by members of either Council or as
the President may otherwise direct. ][<-Struck out]

* * * * * * *

TITLE 18--CRIMES AND CRIMINAL PROCEDURE

PART III--PRISONS AND PRISONERS

CHAPTER 307--EMPLOYMENT

Sec. 4124. Purchase of prison-made products by Federal departments

Other provisions: Purchases by Central Intelligence Agency of
products of Federal Prison Industries. Act Dec. 13, 2003, P.L. 108-177,
Title IV, Sec. 404, 117 Stat. 2632, provides: `Notwithstanding section
4124 of title 18, United States Code, purchases by the Central
Intelligence Agency from Federal Prison Industries shall be made only
if the [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency determines that the product or service to be purchased from Federal Prison Industries best meets the needs of the Agency.'.

TITLE 18--APPENDIX

CLASSIFIED INFORMATION PROCEDURES ACT

Sec. 9. Security procedures

(a) Within one hundred and twenty days of the date of the enactment
of this Act [enacted Oct. 15, 1980], the Chief Justice of the United
States, in consultation with the Attorney General, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
and the Secretary of Defense, shall prescribe rules establishing
procedures for the protection against unauthorized disclosure of any
classified information in the custody of the United States district
courts, courts of appeal, or Supreme Court. Such rules, and any changes
in such rules, shall be submitted to the appropriate committees of
Congress and shall become effective forty-five days after such
submission.

* * * * * * *

TITLE 28--JUDICIARY AND JUDICIAL PROCEDURE

PART II--DEPARTMENT OF JUSTICE

CHAPTER 31--THE ATTORNEY GENERAL

Sec. 519. Supervision of litigation

Except as otherwise authorized by law, the Attorney General shall
supervise all litigation to which the United States, an agency, or
officer thereof is a party, and shall direct all United States
attorneys, assistant United States attorneys, and special attorneys
appointed under section 543 of this title in the discharge of their
respective duties.

Other provisions: Intelligence and national security aspects of
espionage prosecutions. Act Dec. 13, 2003, P.L. 108-177, Title III,
Subtitle C, Sec. 341(b), 117 Stat. 2616, provides: `The Attorney
General, acting through the Office of Intelligence Policy and Review of
the Department of Justice, and in consultation with the [Struck
out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
acting through the Office of the National Counterintelligence
Executive, shall establish policies and procedures to assist the
Attorney General in the consideration of intelligence and national
security-related equities in the development of charging documents and
related pleadings in espionage prosecutions.'.

* * * * * * *

TITLE 31--MONEY AND FINANCE

SUBTITLE I--GENERAL

CHAPTER 9--AGENCY CHIEF FINANCIAL OFFICERS

Sec. 901. Establishment of agency Chief Financial Officers

* * * * * * *

(b) (1) The agencies referred to in subsection (a)(1) are the following:

(A) The Department of Agriculture.

(B) The Department of Commerce.

(C) The Department of Defense.

(D) The Department of Education.

(E) The Department of Energy.

(F) The Department of Health and Human Services.

(G) The Department of Housing and Urban Development.

(H) The Department of the Interior.

(I) The Department of Justice.

(J) The Department of Labor.

(K) The Department of State.

(L) The Department of Transportation.

(M) The Department of the Treasury.

(N) The Department of Veterans Affairs.

(O) The Environmental Protection Agency.

(P) The National Aeronautics and Space Administration.

(Q) The National Intelligence Authority.

* * * * * * *

TITLE 40--PUBLIC BUILDINGS, PROPERTY, AND WORKS

SUBTITLE I--FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES

CHAPTER 1--GENERAL

SUBCHAPTER II--SCOPE

Sec. 113. Limitations

* * * * * * *

(18) the Secretary of the Interior with respect to
procurement for program operations under the Bonneville Project Act of
1937 (16 U.S.C. 832 et seq.); [Struck out->][ or ][<-Struck out]

(19) the Secretary of State with respect to the
furnishing of facilities in foreign countries and reception centers
within the United States [Struck out->][ . ][<-Struck out] ; or

(20) the National Intelligence Director.

TITLE 50--WAR AND NATIONAL DEFENSE

CHAPTER 15--NATIONAL SECURITY

Sec. 401 note

TABLE OF CONTENTS

TITLE I--COORDINATION FOR NATIONAL SECURITY

Sec. 101. National Security Council

JOINT INTELLIGENCE COMMUNITY COUNCIL

SEC. 101A. (a) JOINT INTELLIGENCE COMMUNITY COUNCIL-

(b) MEMBERSHIP- The Joint Intelligence Community Council shall consist of the following:

(1) The National Intelligence Director, who shall chair the Council.

(2) The Secretary of State.

(3) The Secretary of the Treasury.

(4) The Secretary of Defense.

(5) The Attorney General.

(6) The Secretary of Energy.

(7) The Secretary of Homeland Security.

(8) Such other officers of the United States Government as the President may designate from time to time.

(c) FUNCTIONS- The Joint Intelligence Community Council shall
assist the National Intelligence Director in developing and
implementing a joint, unified national intelligence effort to protect
national security by--

(1) advising the Director on establishing
requirements, developing budgets, financial management, and monitoring
and evaluating the performance of the intelligence community, and on
such other matters as the Director may request; and

(2) ensuring the timely execution of programs, policies, and directives established or developed by the Director.

(d) MEETINGS- The Joint Intelligence Community Council shall meet upon the request of the National Intelligence Director.

CENTRAL INTELLIGENCE AGENCY

(b) FUNCTION- The function of the Central Intelligence
Agency is to assist the Director of the Central Intelligence Agency in
carrying out the responsibilities specified in section 103(d).

DIRECTOR OF THE CENTRAL INTELLIGENCE AGENCY

SEC. 103. (a) DIRECTOR OF THE CENTRAL INTELLIGENCE AGENCY- There
is a Director of the Central Intelligence Agency who shall be appointed
by the President, by and with the advice and consent of the Senate.

(b) SUPERVISION- The Director of the Central Intelligence
Agency shall report to the National Intelligence Director regarding the
activities of the Director of the Central Intelligence Agency.

(c) DUTIES- The Director of the Central Intelligence Agency shall--

(1) serve as the head of the Central Intelligence Agency; and

(2) carry out the responsibilities specified in subsection (d).

(d) RESPONSIBILITIES- The Director of the Central Intelligence Agency shall--

(1) collect intelligence through human sources
and by other appropriate means, except that the Director of the Central
Intelligence Agency shall have no police, subpoena, or law enforcement
powers or internal security functions;

(2) correlate and evaluate intelligence related to
the national security and provide appropriate dissemination of such
intelligence;

(3) provide overall direction for and coordination
of the collection of national intelligence outside the United States
through human sources by elements of the intelligence community
authorized to undertake such collection and, in coordination with other
departments, agencies, or elements of the United States Government
which are authorized to undertake such collection, ensure that the most
effective use is made of resources and that appropriate account is
taken of the risks to the United States and those involved in such
collection; and

(4) perform such other functions and duties
pertaining to intelligence relating to the national security as the
President or the National Intelligence Director may direct.

(e) TERMINATION OF EMPLOYMENT OF CIA EMPLOYEES-

(1) Notwithstanding the provisions of any other
law, the Director of the Central Intelligence Agency may, in the
discretion of the Director, terminate the employment of any officer or
employee of the Central Intelligence Agency whenever the Director
considers the termination of employment of such officer or employee
necessary or advisable in the interests of the United States.

(2) Any termination of employment of an officer or
employee under paragraph (1) shall not affect the right of the officer
or employee to seek or accept employment in any other department,
agency, or element of the United States Government if declared eligible
for such employment by the Office of Personnel Management.

(f) COORDINATION WITH FOREIGN GOVERNMENTS- Under the direction
of the National Intelligence Director and in a manner consistent with
section 207 of the Foreign Service Act of 1980 (22 U.S.C. 3927), the
Director of the Central Intelligence Agency shall coordinate the
relationships between elements of the intelligence community and the
intelligence or security services of foreign governments on all matters
involving intelligence related to the national security or involving
intelligence acquired through clandestine means.

[Struck out->][ Sec. 105. Responsibilities of the Secretary of Defense pertaining to the National Foreign Intelligence Program. ][<-Struck out]

Sec. 105. Responsibilities of the Secretary of Defense pertaining to the National Intelligence Program.

Sec. 506. Specificity of National Intelligence Program
budget amounts for counterterrorism, counterproliferation,
counternarcotics, and counterintelligence.

* * * * * * *

Sec. 401a. Definitions

As used in this Act:

(1) The term `intelligence' includes foreign intelligence and counterintelligence.

(2) The term `foreign intelligence' means information
relating to the capabilities, intentions, or activities of foreign
governments or elements thereof, foreign organizations, [Struck
out->][ or foreign persons, or international terrorist activities ][<-Struck out] foreign persons, or international terrorists.

(3) The term `counterintelligence' means information
gathered, and activities conducted, to protect against espionage, other
intelligence activities, sabotage, or assassinations conducted by or on
behalf of foreign governments or elements thereof, foreign
organizations, [Struck out->][ or foreign persons, or international terrorist activities ][<-Struck out] foreign persons, or international terrorists.

(4) The term `intelligence community' includes the following--

[Struck out->][ (A) the
Office of the Director of Central Intelligence, which shall include the
Office of the Deputy Director of Central Intelligence, the National
Intelligence Council (as provided for in section 105(b)(3) [50 USCS
Sec. 403-5]), and such other offices as the Director may designate; ][<-Struck out]

(A) the National Intelligence Authority,

(B) the Central Intelligence Agency;

(C) the National Security Agency;

(D) the Defense Intelligence Agency;

(E) the National Geospatial-Intelligence Agency;

(F) the National Reconnaissance Office;

(G) other offices within the Department of Defense
for the collection of specialized national intelligence through
reconnaissance programs;

(H) the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, and the Department of Energy [Struck out->][ , and the Coast Guard ][<-Struck out] ;

(I) the Bureau of Intelligence and Research of the Department of State;

(J) the Office of Intelligence and Analysis of the Department of the Treasury;

(K) the elements of the Department of Homeland Security concerned with the [Struck out->][ analyses of foreign intelligence information ][<-Struck out] analysis of intelligence information, including the Office of Intelligence of the Coast Guard; and

(L) such other elements of any [Struck out->][ other ][<-Struck out] department or agency as may be designated by the President, or designated jointly by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director and the head of the department or agency concerned, as an element of the intelligence community.

(5) The terms `national intelligence' and `intelligence related to the national security'--

(A) each refer to intelligence which pertains to the interests of more than one department or agency of the Government; and

(B) do not refer to counterintelligence or law
enforcement activities conducted by the Federal Bureau of Investigation
except to the extent provided for in procedures agreed to by the
[Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director and the Attorney General, or otherwise as expressly provided for in this title.

[Struck out->][ (6) The term
`National Foreign Intelligence Program' refers to all programs,
projects, and activities of the intelligence community, as well as any
other programs of the intelligence community designated jointly by the
Director of Central Intelligence and the head of a United States
department or agency or by the President. Such term does not include
programs, projects, or activities of the military departments to
acquire intelligence solely for the planning and conduct of tactical
military operations by United States Armed Forces. ][<-Struck out]

(B) the Permanent Select Committee on Intelligence of the House of Representatives.

COORDINATION FOR NATIONAL SECURITY

Sec. 402. National Security Council

(a) Establishment; Presiding Officer; Functions; Composition- There
is hereby established a council to be known as the National Security
Council (hereinafter in this section referred to as the `Council').

The President of the United States shall preside over meetings
of the Council: Provided, That in his absence he may designate a member
of the Council to preside in his place.

The function of the Council shall be to advise the President
with respect to the integration of domestic, foreign, and military
policies relating to the national security so as to enable the military
services and the other departments and agencies of the Government to
cooperate more effectively in matters involving the national security.

The Council shall be composed of--

(1) the President;

(2) the Vice President;

(3) the Secretary of State;

(4) the Secretary of Defense;

[Struck out->][ (5) the Director for Mutual Security; ][<-Struck out]

[Struck out->][ (6) the Chairman of the National Security Resources Board; and ][<-Struck out]

(5) the Attorney General;

(6) the Secretary of Homeland Security; and

(7) The Secretaries and Under Secretaries of other
executive departments and of the military departments, the Chairman of
the Munitions Board, and the Chairman of the Research and Development
Board, when appointed by the President by and with the advice and
consent of the Senate, to serve at his pleasure.

(b) ADDITIONAL FUNCTIONS- In addition to performing such other
functions as the President may direct, for the purpose of more
effectively coordinating the policies and functions of the departments
and agencies of the Government relating to the national security, it
shall, subject to the direction of the President, be the duty of the
Council--

(1) to assess and appraise the objectives,
commitments, and risks of the United States in relation to our actual
and potential military power, in the interest of national security, for
the purpose of making recommendations to the President in connection
therewith; [Struck out->][ and ][<-Struck out]

(2) to consider policies on matters of common interest
to the departments and agencies of the Government concerned with the
national security, and to make recommendations to the President in
connection therewith [Struck out->][ . ][<-Struck out] ;

(3) assess the objectives, commitments, and risks
of the United States in the interests of homeland security and make
recommendations to the President based on such assessments;

(4) oversee and review the homeland security
policies of the Federal Government and make recommendations to the
President based on such oversight and review; and

(5) perform such other functions as the President may direct.

* * * * * * *

Sec. 402. National Security Council

* * * * * * *

(h) COMMITTEE ON FOREIGN INTELLIGENCE-

(1) There is established within the National
Security Council a committee to be known as the Committee on Foreign
Intelligence (in this subsection referred to as the `Committee').

(5) The Committee shall submit each year to the Council and to the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director a comprehensive report on its activities during the preceding year, including its activities under paragraphs (3) and (4).

* * * * * * *

(i) COMMITTEE ON TRANSNATIONAL THREATS-

(1) There is established within the National
Security Council a committee to be known as the Committee on
Transnational Threats (in this subsection referred to as the
`Committee').

(j) PARTICIPATION BY DIRECTOR OF CENTRAL INTELLIGENCE- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
(or, in the Director's absence, the Deputy Director of Central
Intelligence) may, in the performance of the Director's duties under
this Act and subject to the direction of the President, attend and
participate in meetings of the National Security Council.

* * * * * * *

(j) PARTICIPATION BY DIRECTOR OF CENTRAL INTELLIGENCE- The
Director of Central Intelligence (or, in the Director's absence, the
[Struck out->][ Deputy Director of Central Intelligence ][<-Struck out] Principal Deputy National Intelligence Director)
may, in the performance of the Director's duties under this Act and
subject to the direction of the President, attend and participate in
meetings of the National Security Council.

* * * * * * *

Sec. 402b. National Counterintelligence Executive

(a) ESTABLISHMENT-

(1) There shall be a National Counterintelligence Executive, who shall be appointed by the President.

(2) It is the sense of Congress that the President
should seek the views of the Attorney General, Secretary of Defense,
and [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director, and Director of the Central Intelligence Agency in selecting an individual for appointment as the Executive.

(b) COMPONENT OF OFFICE OF NATIONAL INTELLIGENCE DIRECTOR- The
National Counterintelligence Executive is a component of the Office of
the National Intelligence Director under subtitle C of the National
Intelligence Reform Act of 2004.

[Struck out->][ (b) ][<-Struck out] (c) MISSION-
The mission of the National Counterintelligence Executive shall be to
serve as the head of national counterintelligence for the United States
Government.

[Struck out->][ (c) ][<-Struck out] (d)
DUTIES- Subject to the direction and control of the President, the
duties of the National Counterintelligence Executive are as follows:

(1) To carry out the mission referred to in subsection (b).

(2) To act as chairperson of the National
Counterintelligence Policy Board under section 811 of the
Counterintelligence and Security Enhancements Act of 1994 (title VIII
of Public Law 103-359; 50 U.S.C. 402a), as amended by section 903 of
this Act.

(3) To act as head of the Office of the National Counterintelligence Executive under section 904 [50 U.S.C. Sec. 402c].

(4) To participate as an observer on such boards,
committees, and entities of the executive branch as the President
considers appropriate for the discharge of the mission and functions of
the Executive and the Office of the National Counterintelligence
Executive under section 904 [50 U.S.C. Sec. 402c].

(5) To perform such other duties as may be provided under section 131(b) of the National Intelligence Reform Act of 2004.

* * * * * * *

Sec. 402c. Office of the National Counterintelligence Executive

(a) ESTABLISHMENT- There shall be an Office of the National Counterintelligence Executive.

(b) HEAD OF OFFICE- The National Counterintelligence Executive
shall be the head of the Office of the National Counterintelligence
Executive.

(c) LOCATION OF OFFICE- The Office of the National Counterintelligence Executive shall be located in the [Struck out->][ Office of the Director of Central Intelligence ][<-Struck out] Office of the National Intelligence Director.

* * * * * * *

(e) FUNCTIONS- Subject to the direction and control of the
National Counterintelligence Executive, the functions of the Office of
the National Counterintelligence Executive shall be as follows:

(1) NATIONAL THREAT IDENTIFICATION AND
PRIORITIZATION ASSESSMENT- Subject to subsection (f), in consultation
with appropriate department and agencies of the United States
Government, and private sector entities, to produce on an annual basis
a strategic planning assessment of the counterintelligence requirements
of the United States to be known as the National Threat Identification
and Prioritization Assessment.

(2) NATIONAL COUNTERINTELLIGENCE STRATEGY- Subject to
subsection (f), in consultation with appropriate department and
agencies of the United States Government, and private sector

entities, and based on the most current National Threat
Identification and Prioritization Assessment under paragraph (1), to
produce on an annual basis a strategy for the counterintelligence
programs and activities of the United States Government to be known as
the National Counterintelligence Strategy.

(3) IMPLEMENTATION OF NATIONAL COUNTERINTELLIGENCE
STRATEGY- To evaluate on an ongoing basis the implementation of the
National Counterintelligence Strategy and to submit to the President
periodic reports on such evaluation, including a discussion of any
shortfalls in the implementation of the Strategy and recommendations
for remedies for such shortfalls.

(4) NATIONAL COUNTERINTELLIGENCE STRATEGIC ANALYSES- As directed by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
and in consultation with appropriate elements of the departments and
agencies of the United States Government, to oversee and coordinate the
production of strategic analyses of counterintelligence matters,
including the production of counterintelligence damage assessments and
assessments of lessons learned from counterintelligence activities.

(5) NATIONAL COUNTERINTELLIGENCE PROGRAM BUDGET- In consultation with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director--

* * * * * * *

(h) SUPPORT-

(1) The Attorney General, Secretary of Defense, and [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
may each provide the Office of the National Counterintelligence
Executive such support as may be necessary to permit the Office to
carry out its functions under this section.

(2) Subject to any terms and conditions specified by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
the Director may provide administrative and contract support to the
Office as if the Office were an element of the Central Intelligence
Agency.

* * * * * * *

(l) OVERSIGHT BY CONGRESS- The location of the Office of the
National Counterintelligence Executive within the [Struck out->][ Office of the Director of Central Intelligence ][<-Struck out] Office of the National Intelligence Director shall not be construed as affecting access by Congress, or any committee of Congress, to--

(1) any information, document, record, or paper in the possession of the Office; or

(2) any personnel of the Office.

(m) CONSTRUCTION- Nothing in this section shall be construed as affecting the authority of the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director, the Director of the Central Intelligence Agency,
the Secretary of Defense, the Secretary of State, the Attorney General,
or the Director of the Federal Bureau of Investigation as provided or
specified under the National Security Act of 1947 or under other
provisions of law.

* * * * * * *

Sec. 403. Office of the Director of Central Intelligence

* * * * * * *

Other provisions:

`(b) PILOT PROJECT TO PROMOTE EQUALITY OF EMPLOYMENT
OPPORTUNITIES FOR WOMEN AND MINORITIES THROUGHOUT THE INTELLIGENCE
COMMUNITY USING INNOVATIVE METHODOLOGIES- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall carry out a pilot project under this section to test and evaluate
alternative, innovative methods to promote equality of employment
opportunities in the intelligence community for women, minorities, and
individuals with diverse ethnic and cultural backgrounds, skills,
language proficiency, and expertise.

* * * * * * *

`(a) REPORT- As soon as possible, but not later than one year
after the date of the enactment of this Act, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall submit to the appropriate committees of Congress a report on the
intelligence lessons learned as a result of Operation Iraqi Freedom,
including lessons relating to the following:

`(2) The accuracy, timeliness, and objectivity of intelligence analysis.

`(3) The intelligence support available to policymakers and members of the Armed Forces in combat.

`(4) The coordination of intelligence activities and operations with military operations.

`(5) The strengths and limitations of intelligence systems and equipment.

`(6) Such other matters as the Director considers appropriate.

* * * * * * *

`(f) DIVERSITY PLAN-

`(1) Not later than February 15, 2004, the Director
of Central Intelligence shall submit to Congress a report which
describes the plan of the Director, entitled the `DCI Diversity
Strategic Plan', and any subsequent revision to that plan, to increase
diversity of officers and employees in the intelligence community,
including the short- and long-term goals of the plan. The report shall
also provide a detailed description of the progress that has been made
by each element of the intelligence community in implementing the plan.

`(2) In implementing the plan, the [Struck out->][ Director ][<-Struck out] National Intelligence Director
shall incorporate innovative methods for recruitment and hiring that
the Director has determined to be effective from the pilot project
carried out under this section.

* * * * * * *

Sec. 403-3. Responsibilities of the Director of Central Intelligence

* * * * * * *

Other provisions:

Identification of constituent components of base intelligence
budget. Act Oct. 14, 1994, P.L. 103-359, Title VI, 603, 108 Stat. 3433,
provides: `The Director of Central Intelligence shall include the same
level of budgetary detail for the Base Budget that is

provided for Ongoing Initiatives and New Initiatives to the
Permanent Select Committee on Intelligence of the House of
Representatives and the Select Committee on Intelligence of the Senate
in the congressional justification materials for the annual submission
of the National Foreign Intelligence Program of each fiscal year.'.

Periodic reports on expenditures. Act Oct. 11, 1996, P.L.
104-293, Title VIII, Sec. 807(c), 110 Stat. 3480, provides: `Not later
than January 1, 1997, the Director of Central Intelligence and the
Secretary of Defense shall prescribe guidelines to ensure prompt
reporting to the Director and the Secretary on a periodic basis of
budget execution data for all national, defense-wide, and tactical
intelligence activities.'.

Database program tracking. Act Oct. 11, 1996, P.L. 104-293,
Title VIII, Sec. 807(d), 110 Stat. 3481, provides: `Not later than
January 1, 1999, the Director of Central Intelligence and the Secretary
of Defense shall develop and implement a database to provide timely and
accurate information on the amounts, purposes, and status of the
resources, including periodic budget execution updates, for all
national, defense-wide, and tactical intelligence activities.'.

`(1) SURVEY- The Director of Central Intelligence
shall carry out a survey of current standards for the spelling of
foreign names and places, and the use of geographic coordinates for
such places, among the elements of the intelligence community.

`(2) REPORT- Not later than 90 days after the date of
enactment of this Act, the Director shall submit to the congressional
intelligence committees a report on the survey carried out under
paragraph (1). The report shall be submitted in unclassified form, but
may include a classified annex.

`(b) GUIDELINES-

`(1) ISSUANCE- Not later than 180 days after the
date of enactment of this Act, the Director shall issue guidelines to
ensure the use of uniform spelling of foreign names and places and the
uniform use of geographic coordinates for such places. The guidelines
shall apply to all intelligence reports, intelligence products, and
intelligence databases prepared and utilized by the elements of the
intelligence community.

`(2) BASIS- The guidelines under paragraph (1) shall,
to the maximum extent practicable, be based on current United States
Government standards for the transliteration of foreign names,
standards for foreign place names developed by the Board on Geographic
Names, and a standard set of geographic coordinates.

`(3) SUBMITTAL TO CONGRESS- The Director shall submit a copy of the guidelines to the congressional intelligence committees.

`(c) CONGRESSIONAL INTELLIGENCE COMMITTEES DEFINED- In this section,
the term `congressional intelligence committees' means the following:

`(1) The Select Committee on Intelligence of the Senate.

`(2) The Permanent Select Committee on Intelligence of the House of Representatives.'.

`(a) METHOD OF TRANSLITERATION REQUIRED- Not later than 180
days after the date of the enactment of this Act, the Director of
Central Intelligence shall provide for a standardized method for
transliterating into the Roman alphabet personal and place names
originally rendered in any language that uses an alphabet other than
the Roman alphabet.

`(b) USE BY INTELLIGENCE COMMUNITY- The [Struck out->][ Director ][<-Struck out] National Intelligence Director shall ensure the use of the method established under subsection (a) in--

`(1) all communications among the elements of the intelligence community; and

`(a) IN GENERAL- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall, in coordination with the Secretary of Defense, carry out a pilot
program to assess the feasibility and advisability of permitting
intelligence analysts of various elements of the intelligence community
to access and analyze intelligence from the databases of other elements
of the intelligence community in order to achieve the objectives set
forth in subsection (c).

* * * * * * *

`(g) ASSESSMENT- Not later than February 1, 2004, after the
commencement under subsection (d) of the pilot program under subsection
(a), the Under Secretary of Defense for Intelligence and the [Struck
out->][ Assistant Director of Central Intelligence for Analysis and Production ][<-Struck out] Principal Deputy National Intelligence Director
shall jointly carry out an assessment of the progress of the pilot
program in meeting the objectives set forth in subsection (c).

`(h) REPORT-

`(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall, in coordination with the Secretary of Defense, submit to the
appropriate committees of Congress a report on the assessment carried
out under subsection (g).

`(2) The report shall include--

`(A) a description of the pilot program under subsection (a);

`(B) the findings of the Under Secretary and Assistant Director as a result of the assessment;

`(C) any recommendations regarding the pilot
program that the Under Secretary and the Assistant Director jointly
consider appropriate in light of the assessment; and

`(D) any recommendations that the Director and Secretary consider appropriate for purposes of the report.

`(i) APPROPRIATE COMMITTEES OF CONGRESS DEFINED- In this section, the term `appropriate committees of Congress' means--

`(1) the Select Committee on Intelligence, the
Committee on Armed Services, and the Committee on Appropriations of the
Senate; and

`(2) the Permanent Select Committee on Intelligence,
the Committee on Armed Services, and the Committee on Appropriations of
the House of Representatives.'.

* * * * * * *

Sec. 403-5. Responsibilities of the Secretary of Defense pertaining to the [Struck out->][ National Foreign Intelligence Program ][<-Struck out] National Intelligence Program

(a) IN GENERAL- The Secretary of Defense, in consultation with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director, shall--

(1) [Struck out->][ ensure ][<-Struck out] assist the Director in ensuring
that the budgets of the elements of the intelligence community within
the Department of Defense are adequate to satisfy the overall
intelligence needs of the Department of Defense, including the needs of
the chairman of the Joint Chiefs of Staff and the commanders of the
unified and specified commands and, wherever such elements are
performing governmentwide functions, the needs of other departments and
agencies;

(2) ensure appropriate implementation of the policies and resource decisions of the Director [Struck out->][ of Central Intelligence ][<-Struck out] by elements of the Department of Defense within the [Struck out->][ National Foreign Intelligence Program ][<-Struck out] National Intelligence Program;

(3) ensure that the tactical intelligence activities of
the Department of Defense complement and are compatible with
intelligence activities under the [Struck out->][ National Foreign Intelligence Program ][<-Struck out] National Intelligence Program;

* * * * * * *

(b) RESPONSIBILITY FOR THE PERFORMANCE OF SPECIFIC FUNCTIONS-
Consistent with sections 103 and 104 of this Act [50 USCS Sec. 403-3
and 403-4], the Secretary of Defense shall ensure--

(1) through the National Security Agency (except
as otherwise directed by the President or the National Security
Council), the continued operation of an effective unified organization
for the conduct of signals intelligence activities and shall ensure
that the product is disseminated in a timely manner to authorized
recipients;

(2) through the National Geospatial-Intelligence Agency
(except as otherwise directed by the President or the National Security
Council), with appropriate representation from the intelligence
community, the continued operation of an effective unified organization
within the Department of Defense--

(A) for carrying out tasking of imagery collection;

(B) for the coordination of imagery processing and exploitation activities;

(C) for ensuring the dissemination of imagery in a timely manner to authorized recipients; and

(D) notwithstanding any other provision of law, for--

(i) prescribing technical architecture and
standards related to imagery intelligence and geospatial information
and ensuring compliance with such architecture and standards; and

(ii) developing and fielding systems of common concern related to imagery intelligence and geospatial information;

(3) through the National Reconnaissance Office (except
as otherwise directed by the President or the National Security
Council), the continued operation of an effective unified organization
for the research and development, acquisition, and operation of
overhead reconnaissance systems necessary to satisfy the requirements
of all elements of the intelligence community;

(4) through the Defense Intelligence Agency (except as
otherwise directed by the President or the National Security Council),
the continued operation of an effective unified system within the
Department of Defense for the production of timely, objective military
and military-related intelligence, based upon all sources available to
the intelligence community, and shall ensure the appropriate
dissemination of such intelligence to authorized recipients;

(5) through the Defense Intelligence Agency (except as
otherwise directed by the President or the National Security Council),
effective management of Department of Defense human intelligence
activities, including defense attaches; and

(6) that the military departments maintain sufficient capabilities to collect and produce intelligence to meet--

(A) the requirements of the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director;

* * * * * * *

Sec. 403-4 note. Separation Pay

(a) DEFINITIONS- For purposes of this section--

[Struck out->][ (1) the term `Director' means the Director of Central Intelligence; and ][<-Struck out]

(1) the term `Director' means the Director of the Central Intelligence Agency; and

(1) Except as otherwise provided by law and subject
to paragraph (2), the Attorney General, or the head of any other
department or agency of the Federal Government with law enforcement
responsibilities, shall expeditiously disclose to the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
pursuant to guidelines developed by the Attorney General in
consultation with the Director, foreign intelligence acquired by an
element of the Department of Justice or an element of such department
or agency, as the case may be, in the course of a criminal
investigation.

(2) The Attorney General by regulation and in consultation with the Director [Struck out->][ of Central Intelligence ][<-Struck
out] may provide for exceptions to the applicability of paragraph (1)
for one or more classes of foreign intelligence, or foreign
intelligence with respect to one or more targets or matters, if the
Attorney General determines that disclosure of such foreign
intelligence under that paragraph would jeopardize an ongoing law
enforcement investigation or impair other significant law enforcement
interests.

(b) PROCEDURES FOR NOTICE OF CRIMINAL INVESTIGATIONS- Not later than
180 days after the date of enactment of this section [enacted Oct. 26,
2001], the Attorney General, in consultation with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,

shall develop guidelines to ensure that after receipt of a
report from an element of the intelligence community of activity of a
foreign intelligence source or potential foreign intelligence source
that may warrant investigation as criminal activity, the Attorney
General provides notice to the Director [of Central Intelligence],
within a reasonable period of time, of his intention to commence, or
decline to commence, a criminal investigation of such activity.

[Struck out->][ (1) In
the event of a vacancy in a position referred to in paragraph (2), the
Secretary of Defense shall obtain the concurrence of the Director of
Central Intelligence before recommending to the President an individual
for appointment to the position. If the Director does not concur in the
recommendation, the Secretary may make the recommendation to the
President without the Director's concurrence, but shall include in the
recommendation a statement that the Director does not concur in the
recommendation. ][<-Struck out]

[Struck out->][ (1) In
the event of a vacancy in a position referred to in paragraph (2), the
head of the department or agency having jurisdiction over the position
shall consult with the Director of Central Intelligence before
appointing an individual to fill the vacancy or recommending to the
President an individual to be nominated to fill the vacancy. ][<-Struck out]

[Struck out->][ (B) The Assistant Secretary of State for Intelligence and Research. ][<-Struck out]

[Struck out->][ (C) The Director of the Office of Intelligence of the Department of Energy. ][<-Struck out]

[Struck out->][ (D) The Director of the Office of Counterintelligence of the Department of Energy. ][<-Struck out]

[Struck out->][ (E) The Assistant Secretary for Intelligence and Analysis of the Department of the Treasury. ][<-Struck out]

[Struck out->][ (3) In the
event of a vacancy in the position of the Assistant Director, National
Security Division of the Federal Bureau of Investigation, the Director
of the Federal Bureau of Investigation shall provide timely notice to
the Director of Central Intelligence of the recommendation of the
Director of the Federal Bureau of Investigation of an individual to
fill the position in order that the Director of Central Intelligence
may consult with the Director of the Federal Bureau of Investigation
before the Attorney General appoints an individual to fill the vacancy.
][<-Struck out]

[Struck out->][ (c) ][<-Struck out] (3)
`Government agency' means any executive department, commission,
council, independent establishment, corporation wholly or partly owned
by the United States which is an instrumentality of the United States,
board, bureau, division, service, office, officer, authority,
administration, or other establishment, in the executive branch of the
Government.

* * * * * * *

Sec. 403b. Seal of office of Central Intelligence Agency

The Director [Struck out->][ of Central Intelligence ][<-Struck
out] shall cause a seal of office to be made for the Central
Intelligence Agency, of such design as the President shall approve, and
judicial notice shall be taken thereof.

(1) Notwithstanding subsections (a) and (b) and except as provided in subsections (d), (e), and (f), an individual--

(A) who was divorced on or before December 4, 1991,
from a participant or retired participant in the Central Intelligence
Agency Retirement and Disability System or the Federal Employees
Retirement System Special Category;

(B) who was married to such participant for not
less than ten years during the participant's creditable service, at
least five years of which were spent by the participant during the
participant's service as an employee of the Agency outside the United
States, or otherwise in a position the duties of which qualified the
participant for designation by the Director [Struck out->][ of Central Intelligence ][<-Struck out] as a participant under section 203 of the Central Intelligence Agency Retirement Act (50 U.S.C. 2013); and

* * * * * * *

Sec. 403g. Protection of nature of Agency's functions

In the interests of the security of the foreign intelligence
activities of the United States and in order further to implement
[Struck out->][ section 103(c)(7) of the National Security Act of 1947 (50 U.S.C. 403-3(c)(7)) ][<-Struck out] section 112(a)(11) of the National Intelligence Reform Act of 2004 that the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall be responsible for protecting intelligence sources and methods
from unauthorized disclosure, the Agency shall be exempted from the
provisions of

sections 1 and 2, chapter 795 of the Act of August 28, 1935 (49
Stat. 956, 957; 5 U.S.C. 654), and the provisions of any other law
which require the publication or disclosure of the organization,
functions, names, official titles, salaries, or numbers of personnel
employed by the Agency: Provided, That in furtherance of this section
the Director of the Office of Management and Budget shall make no
reports to the Congress in connection with the Agency under section
607, title VI, chapter 212 of the Act of June 30, 1945, as amended (5
U.S.C. 947(b)).

* * * * * * *

Sec. 403n. Retirement equity for spouses of certain employees

(a) MANNER AND EXTENT OF APPLICABILITY- The provisions of sections
102, 221(b)(1)-(3), 221(f), 221(g), 221(h)(2), 221(i), 221(l), 222,
223, 224, 225, 232(b), 241(b), 241(d), and 264(b) of the Central
Intelligence Agency Retirement Act [50 USCS Sec. 2002, 2031(b)(1)-(3),
(f), (g), (h)(2), (i), (l), 2032-2035, 2052(b), 2071(b), (d), 2094(b)]
([former] 50 U.S.C. 403 note) establishing certain requirements,
limitations, rights, entitlements, and benefits relating to retirement
annuities, survivor benefits, and lump-sum payments for a spouse or
former spouse of an Agency employee who is a participant in the Central
Intelligence Agency Retirement and Disability System shall apply in the
same manner and to the same extent in the case of an Agency employee
who is a participant in the Civil Service Retirement and Disability
System.

(b) REGULATIONS- The Director of the Office of Personnel Management, in consultation with the [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency, shall prescribe such regulations as may be necessary to implement the provisions of this section.

(1) formerly married to an employee or former
employee of the Agency, whose marriage was dissolved by divorce or
annulment before May 7, 1985;

(2) who, at any time during the eighteen-month period
before the divorce or annulment became final, was covered under a
health benefits plan as a member of the family of such employee or
former employee; and

(3) who was married to such employee for not less than
ten years during periods of service by such employee with the Agency,
at least five years of which were spent outside the United States by
both the employee and the former spouse, is eligible for coverage under
a health benefits plan in accordance with the provisions of this
section.

(b) ENROLLMENT FOR HEALTH BENEFITS-

(1) Any individual eligible for coverage under
subsection (a) may enroll in a health benefits plan for self alone or
for self and family if, before the expiration of the six-month period
beginning on the effective date of this section, and in accordance with
such procedures as the Director of the Office of Personnel Management
shall by regulation prescribe, such individual--

(A) files an election for such enrollment; and

(B) arranges to pay currently into the Employees
Health Benefits Fund under section 8909 of title 5, United States Code,
an amount equal to the sum of the employee and agency contributions
payable in the case of an employee enrolled under chapter 89 of such
title in the same health benefits plan and with the same level of
benefits.

(2) The [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency shall, as soon as possible, take all steps practicable--

(A) to determine the identity and current address of each former spouse eligible for coverage under subsection (a); and

(B) to notify each such former spouse of that individual's rights under this section.

(3) The Director of the Office of Personnel Management, upon notification by the [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency, shall waive the six-month limitation set forth in paragraph (1) in any case in which the [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency determines that the circumstances so warrant.

* * * * * * *

Sec. 403q. Inspector General for the Agency

(1) The Inspector General shall, not later than
January 31 and July 31 of each year, prepare and submit to the Director
[Struck out->][ of Central Intelligence ][<-Struck
out] a classified semiannual report summarizing the activities of the
Office during the immediately preceding six-month periods ending
December 31 (of the preceding year) and June 30, respectively. Not
later than the dates each year provided for the transmittal of such
reports in section 507 of the National Security Act of 1947 [50 USCS
Sec. 415b], the Director shall transmit such reports to the
intelligence committees with any comments he may deem appropriate. Such
reports shall, at a minimum, include a list of the title or subject of
each inspection, investigation, or audit conducted during the reporting
period and--

* * * * * * *

(f) SEPARATE BUDGET ACCOUNT- Beginning with fiscal year 1991,
and in accordance with procedures to be issued by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director in consultation with the intelligence committees, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director shall include in the [Struck out->][ National Foreign Intelligence Program ][<-Struck out] National Intelligence Program budget a separate account for the Office of Inspector General established pursuant to this section.

* * * * * * *

Sec. 403t. General Counsel of the Central Intelligence Agency

(a) APPOINTMENT- There is a General Counsel of the Central
Intelligence Agency, appointed from civilian life by the President, by
and with the advice and consent of the Senate.

(b) CHIEF LEGAL OFFICER- The General Counsel is the chief legal officer of the Central Intelligence Agency.

(c) FUNCTIONS- The General Counsel of the Central Intelligence
Agency shall perform such functions as the Director [Struck out->][ of Central Intelligence ][<-Struck out] may prescribe.

* * * * * * *

Sec. 403u. Central services program

* * * * * * *

(g) TERMINATION-

(1) Subject to paragraph (2), the [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency and the Director of the Office of Management and Budget, acting jointly--

(A) may terminate the program under this section and the Fund at any time; and

(B) upon such termination, shall provide for the
disposition of the personnel, assets, liabilities, grants, contracts,
property, records, and unexpended balances of appropriations,
authorizations, allocations, and other funds held, used, arising from,
available to, or to be made available in connection with the program or
the Fund.

(2) The [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of the Central Intelligence Agency
and the Director of the Office of Management and Budget may not
undertake any action under paragraph (1) until 60 days after the date
on which the Directors jointly submit notice of such action to the
Permanent Select Committee on Intelligence of the House of
Representatives and the Select Committee on Intelligence of the Senate.

* * * * * * *

Sec. 404e. National Mission of National Geospatial-Intelligence Agency

(a) IN GENERAL- In addition to the Department of Defense missions
set forth in section 442 of title 10, United States Code, the National
Geospatial-Intelligence Agency shall support the geospatial
intelligence requirements of the Department of State and other
departments and agencies of the United States outside the Department of
Defense.

(b) REQUIREMENTS AND PRIORITIES- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall establish requirements and priorities governing the collection of
national intelligence by the National Geospatial-Intelligence Agency
under subsection (a).

(c) CORRECTION OF DEFICIENCIES- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall develop and implement such programs and policies as the Director
and the Secretary of Defense jointly determine necessary to review and
correct deficiencies identified in the capabilities of the National
Geospatial-Intelligence Agency to accomplish assigned national
missions, including support to the all-source analysis and production
process. The Director shall consult with the Secretary of Defense on
the development and implementation of such programs and policies. The
Secretary shall obtain the advice of the Chairman of the Joint Chiefs
of Staff regarding the matters on which the Director and the Secretary
are to consult under the preceding sentence.

[Struck out->][ Unless otherwise directed
by the President, the Director of Central Intelligence shall have
authority (except as otherwise agreed by the Director and the Secretary
of Defense) to-- ][<-Struck out]

Sec. 404g. Restrictions on intelligence sharing with the United Nations

(a) PROVISION OF INTELLIGENCE INFORMATION TO THE UNITED NATIONS-

(1) No United States intelligence information may
be provided to the United Nations or any organization affiliated with
the United Nations, or to any officials or employees thereof, unless
the President certifies to the appropriate committees of Congress that
the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
in consultation with the Secretary of State and the Secretary of
Defense, has established and implemented procedures, and has worked
with the United Nations to ensure implementation of procedures, for
protecting from unauthorized disclosure United States intelligence
sources and methods connected to such information.

* * * * * * *

(d) RELATIONSHIP TO EXISTING LAW- Nothing in this section shall be construed to--

(1) impair or otherwise affect the authority of the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
to protect intelligence sources and methods from unauthorized
disclosure pursuant to section 103(c)(7) of this Act [50 USCS Sec.
403-3(c)(7)]; or

(2) supersede or otherwise affect the provisions of title V of this Act [50 USCS Sec. 413 et seq.].

* * * * * * *

Sec. 404g. Restrictions on intelligence sharing with the United Nations

* * * * * * *

(d) RELATIONSHIP TO EXISTING LAW- Nothing in this section shall be construed to--

(1) impair or otherwise affect the authority of the
Director of Central Intelligence to protect intelligence sources and
methods from unauthorized disclosure pursuant to [Struck out->][ section 103(c)(7) of this Act ][<-Struck out] section 112(a)(11) of the National Intelligence Reform Act of 2004; or

* * * * * * *

Sec. 404h. Detail of intelligence community personnel; intelligence community assignment program

* * * * * * *

(b) BENEFITS, ALLOWANCES, TRAVEL, INCENTIVES-

(1) An employee detailed under subsection (a) may
be authorized any benefit, allowance, travel, or incentive otherwise
provided to enhance staffing by the organization from which the
employee is detailed.

(2) The head of an agency of an employee detailed under
subsection (a) may pay a lodging allowance for the employee subject to
the following conditions:

(A) The allowance shall be the lesser of the cost
of the lodging or a maximum amount payable for the lodging as
established jointly by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director and--

(a) ANNUAL REPORT ON THE SAFETY AND SECURITY OF RUSSIAN NUCLEAR FACILITIES AND NUCLEAR MILITARY FORCES-

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall submit to the congressional leadership on an annual basis, and to
the congressional intelligence committees on the date each year
provided in section 507 [50 USCS Sec. 415b], an intelligence report
assessing the safety and security of the nuclear facilities and nuclear
military forces in Russia.

(2) Each such report shall include a discussion of the following:

(A) The ability of the Government of Russia to maintain its nuclear military forces.

(B) The security arrangements at civilian and military nuclear facilities in Russia.

(C) The reliability of controls and safety systems at civilian nuclear facilities in Russia.

(D) The reliability of command and control systems and procedures of the nuclear military forces in Russia.

(3) Each such report shall be submitted in unclassified form, but may contain a classified annex.

(b) ANNUAL REPORT ON HIRING AND RETENTION OF MINORITY EMPLOYEES-

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall, on an annual basis, submit to Congress a report on the
employment of covered persons within each element of the intelligence
community for the preceding fiscal year.

(2) Each such report shall include disaggregated data
by category of covered person from each element of the intelligence
community on the following:

(A) Of all individuals employed in the element
during the fiscal year involved, the aggregate percentage of such
individuals who are covered persons.

(B) Of all individuals employed in the element
during the fiscal year involved at the levels referred to in clauses
(i) and (ii), the percentage of covered persons employed at such levels:

(i) Positions at levels 1 through 15 of the General Schedule.

(ii) Positions at levels above GS-15.

(C) Of all individuals hired by the element
involved during the fiscal year involved, the percentage of such
individuals who are covered persons.

(3) Each such report shall be submitted in unclassified form, but may contain a classified annex.

(4) Nothing in this subsection shall be construed as
providing for the substitution of any similar report required under
another provision of law.

(5) In this subsection, the term `covered persons' means--

(A) racial and ethnic minorities;

(B) women; and

(C) individuals with disabilities.

(c) ANNUAL REPORT ON THREAT OF ATTACK ON THE UNITED STATES USING WEAPONS OF MASS DESTRUCTION-

(1) Not later each year than the date provided in section 507 [50 USCS Sec. 415b], the [Struck out->][ Director ][<-Struck out] National Intelligence Director shall submit to the congressional committees specified in paragraph (3) a report assessing the following:

Not later each year than the date provided in section 507 [50 USCS Sec. 415b], the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director, the Director of the Central Intelligence Agency,
the Director of the [National Security Agency,] the Director of the
Defense Intelligence Agency, and the Director of the National Imagery
and Mapping Agency [National Geospatial-Intelligence Agency] shall each
submit to the congressional intelligence committees a report describing
the activities being undertaken by such official to ensure that the
financial statements of such agency can be audited in accordance with
applicable law and requirements of the Office of Management and Budget.

* * * * * * *

Sec. 404j. Limitation on establishment or operation of diplomatic intelligence support centers

(a) IN GENERAL-

(1) A diplomatic intelligence support center may
not be established, operated, or maintained without the prior approval
of the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director.

(2) The Director may only approve the establishment,
operation, or maintenance of a diplomatic intelligence support center
if the Director determines that the establishment, operation, or
maintenance of such center is required to provide necessary
intelligence support in furtherance of the national security interests
of the United States.

(b) PROHIBITION OF USE OF APPROPRIATIONS- Amounts appropriated pursuant to authorizations

by law for intelligence and intelligence-related activities may
not be obligated or expended for the establishment, operation, or
maintenance of a diplomatic intelligence support center that is not
approved by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director.

(c) DEFINITIONS- In this section:

(1) The term `diplomatic intelligence support
center' means an entity to which employees of the various elements of
the intelligence community (as defined in section 3(4) [50 USCS Sec.
401a(4)]) are detailed for the purpose of providing analytical
intelligence support that--

(A) consists of intelligence analyses on military
or political matters and expertise to conduct limited assessments and
dynamic taskings for a chief of mission; and

(B) is not intelligence support traditionally provided to a chief of mission by the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director.

(2) The term `chief of mission' has the meaning given that term by section 102(3) of the Foreign Service Act of 1980 (22 U.S.C. 3902(3)),
and includes ambassadors at large and ministers of diplomatic missions
of the United States, or persons appointed to lead United States
offices abroad designated by the Secretary of State as diplomatic in
nature.

* * * * * * *

Sec. 404k. Travel on any common carrier for certain intelligence collection personnel

(a) IN GENERAL- Notwithstanding any other provision of law, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director may authorize travel on any common carrier when such travel, in the discretion of the Director--

(1) is consistent with intelligence community mission requirements, or

(2) is required for cover purposes, operational needs,
or other exceptional circumstances necessary for the successful
performance of an intelligence community mission.

(b) AUTHORIZED DELEGATION OF DUTY- The [Struck out->][ Director ][<-Struck out] National Intelligence Director may only delegate the authority granted by this section [Struck out->][
to the Deputy Director of Central Intelligence, or with respect to
employees of the Central Intelligence Agency the Director may delegate
such authority to the Deputy Director for Operations ][<-Struck out] to
the Principal Deputy National Intelligence Director, or, with respect
to the employees of the Central Intelligence Agency, to the Director of
the Central Intelligence Agency.

* * * * * * *

Sec. 404l. POW/MIA analytic capability

(a) REQUIREMENT-

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall, in consultation with the Secretary of Defense, establish and
maintain in the intelligence community an analytic capability with
responsibility for intelligence in support of the activities of the
United States relating to individuals who, after December 31, 1990, are
unaccounted for United States personnel.

* * * * * * *

Sec. 404n. National Virtual Translation Center

(a) ESTABLISHMENT- [Struck out->][ The Director of Central Intelligence, acting as the head of the intelligence community ][<-Struck out] National Intelligence Director,
shall establish in the intelligence community an element with the
function of connecting the elements of the intelligence community
engaged in the acquisition, storage, translation, or analysis of voice
or data in digital form.

* * * * * * *

404n-1. Foreign Terrorist Asset Tracking Center

(a) ESTABLISHMENT- The [Struck out->][
Director of Central Intelligence, acting as the head of the
intelligence community, shall establish in the Central Intelligence
Agency ][<-Struck out] National Intelligence Director shall establish within the Central Intelligence Agency
an element responsible for conducting all-source intelligence analysis
of information relating to the financial capabilities, practices, and
activities of individuals, groups, and nations associated with
international terrorism in their activities relating to international
terrorism.

* * * * * * *

Sec. 404n-2. Terrorist identification classification system

(a) REQUIREMENT-

(1) The [Struck out->][ Director of Central Intelligence, acting as head of the Intelligence Community ][<-Struck out] National Intelligence Director, shall--

* * * * * * *

(c) INFORMATION SHARING- Subject to [Struck out->][ section 103(c)(7) of the National Security Act of 1947 (50 U.S.C. 403-3(c)(7)) ][<-Struck out] section 112(a)(11) of the National Intelligence Reform Act of 2004,
relating to the protection of intelligence sources and methods, the
Director shall provide for the sharing of the list, and information on
the list, with such departments and agencies of the Federal Government,
State and local government agencies, and entities of foreign
governments and international organizations as the Director considers
appropriate.

* * * * * * *

MISCELLANEOUS AND CONFORMING PROVISIONS

(a) The Secretary of Defense, the Director of the Office of Defense Mobilization [Struck out->][ Director of the Federal Emergency Management Agency ][<-Struck out] , the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
and the National Security Council, acting through its Executive
Secretary, are authorized to appoint such advisory committees and to
employ, consistent with other provisions of this Act, such part-time
advisory personnel as they may deem necessary in carrying out their
respective functions and the functions of agencies under their control.
Persons holding other offices or positions under the United States for
which they receive compensation, while serving as members of such
committees, shall receive no additional compensation for such service.
Retired members of the uniformed services employed by the [Struck
out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
who hold no other office or position under the United States for which
they receive compensation, other members of such committees and other
part-time advisory personnel so employed may serve without compensation
or may receive compensation at a daily rate not to exceed the daily
equivalent of the rate of pay in effect for grade GS-18 of the General
Schedule established by section 5332 of title 5, United States Code, as
determined by the appointing authority.

* * * * * * *

ACCOUNTABILITY FOR INTELLIGENCE ACTIVITIES

Sec. 413. General congressional oversight provisions

* * * * * * *

(d) PROCEDURES TO PROTECT FROM UNAUTHORIZED DISCLOSURE- The
House of Representatives and the Senate shall each establish, by rule
or resolution of such House, procedures to protect from unauthorized
disclosure all classified information, and all information relating to
intelligence sources and methods, that is furnished to the
congressional intelligence committees or to Members of Congress under
this title [50 USCS Sec. 413 et seq.]. Such procedures shall be
established in consultation with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director.
In accordance with such procedures, each of the congressional
intelligence committees shall promptly call to the attention of its
respective House, or to any appropriate committee or committees of its
respective House, any matter relating to intelligence activities
requiring the attention of such House or such committee or committees.

* * * * * * *

Sec. 413a. Reporting of intelligence activities other than covert actions

(a) IN GENERAL- To the extent consistent with due regard for the
protection from unauthorized disclosure of classified information
relating to sensitive intelligence sources and methods or other
exceptionally sensitive matters, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
and the heads of all departments, agencies, and other entities of the
United States Government involved in intelligence activities shall--

(1) keep the congressional intelligence committees
fully and currently informed of all intelligence activities, other than
a covert action (as defined in section 503(e) [50 USCS Sec. 413b(e)]),
which are the responsibility of, are engaged in by, or are carried out
for or on behalf of, any department, agency, or entity of the United
States Government, including

any significant anticipated intelligence activity and any significant intelligence failure; and

(2) furnish the congressional intelligence
committees any information or material concerning intelligence
activities, other than covert actions, which is within their custody or
control, and which is requested by either of the congressional
intelligence committees in order to carry out its authorized
responsibilities.

(b) FORM AND CONTENTS OF CERTAIN REPORTS- Any report relating to a
significant anticipated intelligence activity or a significant
intelligence failure that is submitted to the congressional
intelligence committees for purposes of subsection (a)(1) shall be in
writing, and shall contain the following:

(1) A concise statement of any facts pertinent to such report.

(2) An explanation of the significance of the intelligence activity or intelligence failure covered by such report.

(c) STANDARDS AND PROCEDURES FOR CERTAIN REPORTS- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
in consultation with the heads of the departments, agencies, and
entities referred to in subsection (a), shall establish standards and
procedures applicable to reports covered by subsection (b).

Sec. 413b. Presidential approval and reporting of covert actions

* * * * * * *

(b) REPORTS TO INTELLIGENCE COMMITTEES; PRODUCTION OF
INFORMATION- To the extent consistent with due regard for the
protection from unauthorized disclosure of classified information
relating to sensitive intelligence sources and methods or other
exceptionally sensitive matters, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director and the heads of all departments, agencies, and entities of the United States Government involved in a covert action--

* * * * * * *

Sec. 414. Funding of intelligence activities

(a) OBLIGATIONS AND EXPENDITURES FOR INTELLIGENCE OR
INTELLIGENCE-RELATED ACTIVITY; PREREQUISITES- Appropriated funds
available to an intelligence agency may be obligated or expended for an
intelligence or intelligence-related activity only if--

(1) those funds were specifically authorized by the Congress for use for such activities; or

(2) in the case of funds from the [Struck out->][ Reserve for Contingencies of the Central Intelligence Agency ][<-Struck out] Reserve for Contingencies of the National Intelligence Director
and consistent with the provision of section 503 of this Act [50 USCS
Sec. 413b] concerning any significant anticipated intelligence
activity, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director has notified the appropriate congressional committees of the intent to make such funds available for such activity; or

(3) in the case of funds specifically authorized by the Congress for a different activity--

(A) the activity to be funded is a higher priority intelligence or intelligence-related activity;

(B) the need for funds for such activity is based on unforseen [unforeseen] requirements; and

(C) the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
the Secretary of Defense, or the Attorney General, as appropriate, has
notified the appropriate congressional committees of the intent to make
such funds available for such activity;

(4) nothing in this subsection prohibits obligation or
expenditure of funds available to an intelligence agency in accordance
with sections 1535 and 1536 of title 31, United States Code.

(b) ACTIVITIES DENIED FUNDING BY CONGRESS- Funds available to an
intelligence agency may not be made available for any intelligence or
intelligence-related activity for which funds were denied by the
Congress.

(c) PRESIDENTIAL FINDING REQUIRED FOR EXPENDITURE OF FUNDS ON
COVERT ACTION- No funds appropriated for, or otherwise available to,
any department, agency, or entity of the United States Government may
be expended, or may be directed to be expended, for any covert action,
as defined in section 503(e) [50 USCS Sec. 413b(e)], unless and until a
Presidential finding required by subsection (a) of section 503 [50 USCS
413b(a)] has been signed or otherwise issued in accordance with that
subsection.

(1) Except as otherwise specifically provided by
law, funds available to an intelligence agency that are not
appropriated funds may be obligated or expended for an intelligence or
intelligence-related activity only if those funds are used for
activities reported to the appropriate congressional committees
pursuant to procedures which identify--

(A) the types of activities for which nonappropriated funds may be expended; and

(B) the circumstances under which an activity must
be reported as a significant anticipated intelligence activity before
such funds can be expended.

(2) Procedures for purposes of paragraph (1) shall be
jointly agreed upon by the congressional intelligence committees and,
as appropriate, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director or the Secretary of Defense.

* * * * * * *

Sec. 415a. [Struck out->][
Specificity of National Foreign Intelligence Program budget amounts for
counterterrorism, counterproliferation, counternarcotics, and
counterintelligence ][<-Struck out] Specificity
of National Intelligence Program Budget Amounts for Counterterrorism,
Counterproliferation, Counternarcotics, and Counterintelligence

(a) IN GENERAL- The budget justification materials submitted to
Congress in support of the budget of the President for a fiscal year
that is submitted to Congress under section 1105(a) of title 31, United
States Code, shall set forth separately the aggregate amount requested
for that fiscal year for the [Struck out->][ National Foreign Intelligence Program ][<-Struck out] National Intelligence Program for each of the following:

(1) Counterterrorism.

(2) Counterproliferation.

(3) Counternarcotics.

(4) Counterintelligence.

* * * * * * *

Sec. 415a-1. Budget treatment of costs of acquisition of major systems by the intelligence community

(a) INDEPENDENT COST ESTIMATES-

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall, in consultation with the head of each element of the
intelligence community concerned, prepare an independent cost estimate
of the full life-cycle cost of development, procurement, and operation
of each major system to be acquired by the intelligence community.

* * * * * * *

(b) PREPARATION OF INDEPENDENT COST ESTIMATES-

(1) The Director shall establish within the [Struck out->][ Office of the Deputy Director of Central Intelligence ][<-Struck out] Office of the National Intelligence Director
for Community Management an office which shall be responsible for
preparing independent cost estimates, and any updates thereof, under
subsection (a), unless a designation is made under paragraph (2).

* * * * * * *

PROTECTION OF CERTAIN NATIONAL SECURITY INFORMATION

Sec. 423. Report

(a) ANNUAL REPORT BY PRESIDENT TO CONGRESS ON MEASURES TO PROTECT
IDENTITIES OF COVERT AGENTS- The President, after receiving information
from the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
shall submit to the congressional intelligence committees an annual
report on measures to protect the identities of covert agents, and on
any other matter relevant to the protection of the identities of covert
agents. The date for the submittal of the report shall be the date
provided in section 507 [50 USCS Sec. 415b].

* * * * * * *

PROTECTION OF OPERATIONAL FILES

Sec. 431. Operational files of the Central Intelligence Agency

(a) EXEMPTION BY DIRECTOR OF CENTRAL INTELLIGENCE- [Struck out->][ Operational files of the Central Intelligence Agency may be exempted by the Director of Central Intelligence ][<-Struck out] The
Director of the Central Intelligence Agency, with the coordination of
the National Intelligence Director, may exempt operational files of the
Central Intelligence Agency from the provisions of section 552 of
title 5, United States Code (Freedom of Information Act), which require
publication or disclosure, or search or review in connection therewith.

* * * * * * *

(c) SEARCH AND REVIEW FOR INFORMATION- Notwithstanding
subsection (a) of this section, exempted operational files shall
continue to be subject to search and review for information
concerning--

(1) United States citizens or aliens lawfully
admitted for permanent residence who have requested information on
themselves pursuant to the provisions of section 552 of title 5, United
States Code (Freedom of Information Act), or section 552a of title 5,
United States Code (Privacy Act of 1974);

(2) any special activity the existence of which is not
exempt from disclosure under the provisions of section 552 of title 5,
United States Code (Freedom of Information Act); or

(3) the specific subject matter of an investigation by
the congressional intelligence committees, the Intelligence Oversight
Board, the Department of Justice, the Office of General Counsel of the
Central Intelligence Agency, the Office of Inspector General of the
Central Intelligence Agency, [Struck out->][ or the Office of the Director of Central Intelligence ][<-Struck out] the Office of the Director of the Central Intelligence Agency, or the Office of the National Intelligence Director
for any impropriety, or violation of law, Executive order, or
Presidential directive, in the conduct of an intelligence activity.

* * * * * * *

(g) DECENNIAL REVIEW OF EXEMPTED OPERATIONAL FILES-

(1) Review by [Struck out->][ Director of Central Intelligence ][<-Struck out] Director of Central Intelligence Agency and the National Intelligence Director.
Not less than once every ten years, the Director of Central
Intelligence shall review the exemptions in force under subsection (a)
to determine whether such exemptions may be removed from any category
of exempted files or any portion thereof.

* * * * * * *

Sec. 432. Operational files of the National Geospatial-Intelligence Agency

(1) The Director of the National Geospatial-Intelligence Agency, with the coordination of the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
may exempt operational files of the National Geospatial-Intelligence
Agency from the provisions of section 552 of title 5, United States
Code, which require publication, disclosure, search, or review in
connection therewith.

* * * * * * *

(b) DECENNIAL REVIEW OF EXEMPTED OPERATIONAL FILES-

(1) Not less than once every 10 years, the Director of the National Geospatial-Intelligence Agency and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall review the exemptions in force under subsection (a)(1) to
determine whether such exemptions may be removed from the category of
exempted files or any portion thereof. The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director must approve any determination to remove such exemptions.

* * * * * * *

Sec. 432a. Operational files of the National Reconnaissance Office

(1) The Director of the National Reconnaissance Office, with the coordination of the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director, may exempt operational files of the National Reconnaissance Office from the provisions of section 552 of title 5,

United States Code, which require publication, disclosure, search, or review in connection therewith.

* * * * * * *

(6)(A) Except as provided in subparagraph (B),
whenever any person who has requested agency records under section 552
of title 5, United States Code, alleges that NRO has withheld records
improperly because of failure to comply with any provision of this
section, judicial review shall be available under the terms set forth
in section 552(a)(4)(B) of title 5, United States Code.

(B) Judicial review shall not be available in the manner provided for under subparagraph (A) as follows:

* * * * * * *

(viii) Any information filed with, or produced
for the court pursuant to clauses (i) and (iv) shall be coordinated
with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director prior to submission to the court.

* * * * * * *

(b) DECENNIAL REVIEW OF EXEMPTED OPERATIONAL FILES-

(1) Not less than once every 10 years, the Director of the National Reconnaissance Office and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall review the exemptions in force under subsection (a)(1) to
determine whether such exemptions may be removed from the category of
exempted files or any portion thereof. The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director must approve any determination to remove such exemptions.

* * * * * * *

432b. Operational files of the National Security Agency

(a) EXEMPTION OF CERTAIN OPERATIONAL FILES FROM SEARCH, REVIEW,
PUBLICATION, OR DISCLOSURE- The Director of the National Security
Agency, in coordination with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
may exempt operational files of the National Security Agency from the
provisions of section 552 of title 5, United States Code, which require
publication, disclosure, search, or review in connection therewith.

* * * * * * *

(f) ALLEGATION; IMPROPER WITHHOLDING OF RECORDS; JUDICIAL REVIEW-

(1) Except as provided in paragraph (2), whenever
any person who has requested agency records under section 552 of title
5, United States Code, alleges that the National Security Agency has
withheld records improperly because of failure to comply with any
provision of this section, judicial review shall be available under the
terms set forth in section 552(a)(4)(B) of title 5, United States Code.

(2) Judicial review shall not be available in the manner provided for under paragraph (1) as follows:

* * * * * * *

(H) Any information filed with, or produced for
the court pursuant to subparagraphs (A) and (D) shall be coordinated
with the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director before submission to the court.

(g) DECENNIAL REVIEW OF EXEMPTED OPERATIONAL FILES-

(1) Not less than once every 10 years, the Director of the National Security Agency and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall review the exemptions in force under subsection (a) to determine
whether such exemptions may be removed from a category of exempted
files or any portion thereof. The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director must approve any determination to remove such exemptions.

* * * * * * *

EDUCATION IN SUPPORT OF NATIONAL INTELLIGENCE

441g. Scholarships and work-study for pursuit of graduate degrees in science and technology

(a) PROGRAM AUTHORIZED- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
may carry out a program to provide scholarships and work-study for
individuals who are pursuing graduate degrees in fields of study in
science and technology that are identified by the Director as
appropriate to meet the future needs of the intelligence community for
qualified scientists and engineers.

(b) ADMINISTRATION- If the [Struck out->][ Director ][<-Struck out] National Intelligence Director carries out the program under subsection (a), the Director shall administer the program through the [Struck out->][ Assistant Director of Central Intelligence for Administration ][<-Struck out] Office of the National Intelligence Director.

(c) IDENTIFICATION OF FIELDS OF STUDY- If the [Struck out->][ Director ][<-Struck out] National Intelligence Director
carries out the program under subsection (a), the Director shall
identify fields of study under subsection (a) in consultation with the
other heads of the elements of the intelligence community.

(d) ELIGIBILITY FOR PARTICIPATION- An individual eligible to participate in the program is any individual who--

(1) either--

(A) is an employee of the intelligence community; or

(B) meets criteria for eligibility for employment in the intelligence community that are established by the [Struck out->][ Director ][<-Struck out] National Intelligence Director;

(2) is accepted in a graduate degree program in a field of study in science or technology identified under subsection (a); and

(3) is eligible for a security clearance at the level of Secret or above.

(e) REGULATIONS- If the [Struck out->][ Director ][<-Struck out] National Intelligence Director carries out the program under subsection (a), the Director shall prescribe regulations for purposes of the

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall carry out a pilot program to ensure that selected students or
former students are provided funds to continue academic training, or
are reimbursed for academic training previously obtained, in areas of
specialization that the Director, in consultation with the other heads
of the elements of the intelligence community, identifies as areas in
which the current analytic capabilities of the intelligence community
are deficient or in which future analytic capabilities of the
intelligence community are likely to be deficient.

* * * * * * *

ADDITIONAL MISCELLANEOUS PROVISIONS

442a. Counterintelligence initiatives

(a) INSPECTION PROCESS-

(1) In order to protect intelligence sources and methods from unauthorized disclosure, the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall establish and implement an inspection process for all agencies
and departments of the United States that handle classified information
relating to the national security of the United States intended to
assure that those agencies and departments maintain effective
operational security practices and programs directed against
counterintelligence activities.

(2) The Director shall carry out the process through the Office of the National Counterintelligence Executive.

(b) ANNUAL REVIEW OF DISSEMINATION LISTS-

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall establish and implement a process for all elements of the
intelligence community to review, on an annual basis, individuals
included on distribution lists for access to classified information.
Such process shall ensure that only individuals who have a
particularized `need to know' (as determined by the Director) are
continued on such distribution lists.

(2) Not later than October 15 of each year, the
Director shall certify to the congressional intelligence committees
that the review required under paragraph (1) has been conducted in all
elements of the intelligence community during the preceding fiscal year.

(1) The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall establish and implement a process by which each head of an
element of the intelligence community directs that all employees of
that element, in order to be granted access to classified information
referred to in subsection (a) of section 1.3 of Executive Order No.
12968 (August 2, 1995; 60 Fed. Reg. 40245; 50 U.S.C. 435 note), submit
financial disclosure forms as required under subsection (b) of such
section.

(2) The Director shall carry out paragraph (1) through the Office of the National Counterintelligence Executive.

(d) ARRANGEMENTS TO HANDLE SENSITIVE INFORMATION- The [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall establish, for all elements of the intelligence community,
programs and procedures by which sensitive classified information
relating to human intelligence is safeguarded against unauthorized
disclosure by employees of those elements.

(4) With respect to electronic surveillance
authorized by this subsection, the Attorney General may direct a
specified communication common carrier to--

(A) furnish all information, facilities, or
technical assistance necessary to accomplish the electronic
surveillance in such a manner as will protect its secrecy and produce a
minimum of interference with the services that such carrier is
providing its customers; and

(B) maintain under security procedures approved by the Attorney General and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
any records concerning the surveillance or the aid furnished which such
carrier wishes to retain. The Government shall compensate, at the
prevailing rate, such carrier for furnishing such aid.

* * * * * * *

1803. Designation of judges

* * * * * * *

(c) EXPEDITIOUS CONDUCT OF PROCEEDINGS; SECURITY MEASURES FOR
MAINTENANCE OF RECORDS- Proceedings under this Act shall be conducted
as expeditiously as possible. The record of proceedings under this Act,
including applications made and orders granted, shall be maintained
under security measures established by the Chief Justice in
consultation with the Attorney General and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director.

* * * * * * *

1804. Applications for court orders

* * * * * * *

(e) PERSONAL REVIEW BY ATTORNEY GENERAL-

(1)(A) Upon written request of the Director of the
Federal Bureau of Investigation, the Secretary of Defense, the
Secretary of State, or the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director,
the Attorney General shall personally review under subsection (a) an
application under that subsection for a target described in section
101(b)(2) [50 USCS 1801(b)(2)].

* * * * * * *

Sec. 1805. Issuance of order

* * * * * * *

(c) SPECIFICATIONS AND DIRECTIONS OF ORDERS- An order approving an electronic surveillance under this section shall--

(1) specify--

(A) the identity, if known, or a description of the target of the electronic surveillance;

(B) the nature and location of each of the
facilities or places at which the electronic surveillance will be
directed, if known;

(C) the type of information sought to be acquired
and the type of communications or activities to be subjected to the
surveillance;

(D) the means by which the electronic surveillance
will be effected and whether physical entry will be used to effect the
surveillance;

(E) the period of time during which the electronic surveillance is approved; and

(F) whenever more than one electronic, mechanical,
or other surveillance device is to be used under the order, the
authorized coverage of the devices involved and what minimization
procedures shall apply to information subject to acquisition by each
device; and

(2) direct--

(A) that the minimization procedures be followed;

(B) that, upon the request of the applicant, a
specified communication or other common carrier, landlord, custodian,
or other specified person, or in circumstances where the Court finds
that the actions of the target of the application may have the effect
of thwarting the identification of a specified person, such other
persons, furnish the applicant forthwith all information, facilities,
or technical assistance necessary to accomplish the electronic
surveillance in such a manner as will protect its secrecy and produce a
minimum of interference with the services that such carrier, landlord,
custodian, or other person is providing that target of electronic
surveillance;

(C) that such carrier, landlord, custodian, or
other person maintain under security procedures approved by the
Attorney General and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director any records concerning the surveillance or the aid furnished that such person wishes to retain; and

(2) DIRECTOR- The term `Director' means the Director of the Central Intelligence Agency.

* * * * * * *

THE CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM

ESTABLISHMENT OF SYSTEM

Sec. 2011. The CIARDS system

(a) IN GENERAL-

(1) ESTABLISHMENT OF SYSTEM- There is a retirement
and disability system for certain employees of the Central Intelligence
Agency known as the Central Intelligence Agency Retirement and
Disability System (hereinafter in this Act [50 USCS Sec. 2001 et seq.]
referred to as the `system'), originally established pursuant to title
II of the Central Intelligence Agency Retirement Act of 1964 for
Certain Employees [former 50 USCS 403 note].

(2) DCI REGULATIONS- The Director shall prescribe
regulations for the system. The Director shall submit any proposed
regulations for the system to the congressional intelligence committees
not less than 14 days before they take effect.

(b) ADMINISTRATION OF SYSTEM- The Director shall administer the
system in accordance with regulations prescribed under this title [50
USCS Sec. 2011 et seq.] and with the principles established by this
title [50 USCS 2011 et seq.].

(c) FINALITY OF DECISIONS OF DCI- In the interests of the
security of the foreign intelligence activities of the United States
and in order further to implement [Struck out->][
paragraph (6) of section 103(c) of the National Security Act of 1947
(50 U.S.C. 403-3(c)) that the Director of Central Intelligence ][<-Struck out] section 112(a)(11) of the National Intelligence Reform Act of 2004 that the National Intelligence Director
shall be responsible for protecting intelligence sources and methods
from unauthorized disclosure, and notwithstanding the provisions of
chapter 7 of title 5, United States Code [5 USCS Sec. 701 et seq.], or
any other provision of law (except section 305(b) of this Act [50 USCS
2155(b)]), any determination by the Director authorized by this Act [50
USCS 2001 et seq.] shall be final and conclusive and shall not be
subject to review by any court.

* * * * * * *

117 STAT. 2634

SEC. 504. MEASUREMENT AND SIGNATURES INTELLIGENCE RESEARCH PROGRAM.

(a) RESEARCH PROGRAM- (1) The Secretary of Defense and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall jointly carry out a program to incorporate the results of basic
research on sensors into the measurement and signatures intelligence
systems of the United States, to the extent the results of such
research are applicable to such systems.

(2) In carrying out paragraph (1), the Secretary of Defense and the [Struck out->][ Director of Central Intelligence ][<-Struck out] National Intelligence Director
shall act through the Director of the Defense Intelligence Agency's
Directorate for MASINT and Technical Collection (hereinafter in this
section referred to as the `Director'.)